1951-02-12

[Stage Direction]
31, 1950-AUDIT OF ACCOUNTS FOR YEAR

[Stage Direction]
Righl Hon. L. S. St. Laurent (Prime Minister): Mr. Speaker, I should like to lay on the table two copies, in English, of the annual report of the federal district commission for the year ended December 31, 1950. The French version is being prepared and will be brought down as soon as it is ready.
I should also like to table two copies of the report of the audit of the federal district commission's accounts for the fiscal year ended March 31, 1950.


Right Hon. L. S. St. Laurent (Prime Minister):: I should like to lay on the table two copies of the first consolidated index and table of amendments of statutory orders and regulations published since the Regulations Act came into effect. Perhaps it would be useful if I gave a short word of explanation of the consolidated index and table of amendments.
Hon. members will recall that the consolidation of the statutory orders and regulations is as of the 31st of December, 1949. This index is an alphabetical index of all orders and regulations passed during the year 1950, with an indication of the publication and the page at which they are to be found.
There is also an index in the form that has become traditional in our statutes, of the orders and regulations themselves, in alphabetical order, with an indication of the amendments thereto made during the year 1950. It is the intention to have the consolidated index and table of amendments kept up to date quarterly. Therefore each quarter there will be a new edition which will enable those who wish to consult these orders and regulations to have in convenient form an indication of what is in the five volumes of consolidation, and an indication of what has been done with respect to any order or regulation since that time.


Mr. Knowles:: Does the index indicate as well the orders and regulations that have been cancelled?


Louis Stephen St-Laurent: Yes; it is a report of what has happened to what is in the consolidation since it was published as of the 31st of December, 1949.



ROYAL COMMISSION ON TRANSPORTATION


Louis Stephen St-Laurent: I should like to inform the house that the royal commission on transportation handed its report to the Minister of Transport (Mr. Chevrier) late Friday night, that it was received in the privy council office Saturday morning, and that the usual minute with respect to it was adopted by council today transmitting it to His Excellency the Governor General. At the same time instructions were given to have it printed with all possible dispatch, and as soon as it is printed it will be tabled and published. It is a document of 693 typewritten pages. It is signed by the three commissioners, and includes an appendix of observations and reservations by Dr. H. F. Angus, and a memorandum on transportation by Dr. H. A. Innis.



EXTENSION OF RESTRICTIONS TO ADDITIONAL CLASSES OF CONSTRUCTION

[Stage Direction]
On the orders of the day:
Right Hon. C. D. Howe (Minister of Trade and Commerce):: I wish to make a brief statement on the supply situation affecting steel.
In my remarks in the house last Thursday I indicated that further orders might be necessary to protect supplies of steel for essential construction projects. Order No. 3 was issued on Friday last. This order restricts the use of steel for a wide range of construction projects. Order No. 1, which was issued last December, remains in effect until March 1, when order No. 3 becomes effective in its place.
This extension of restrictions to additional classes of construction has been made necessary by the increasing requirements of steel for urgent projects which are essential to our
252	HOUSE OF
Restrictions on use of steel preparedness program. For instance, we must assure adequate supplies of steel for construction of radar stations, military barracks and other pi ejects which are required for the armed services. Also, we must assure a supply of steel for the construction of factories for the immediate production of aircraft, radar equipment and other military items. Equally important for the long pull to our joint defence efforts with other members of the United Nations is the expansion of Canadian capacity to produce strategic raw materials and to provide transportation and other essential services for the defence program. It has become apparent during recent weeks that in order to proceed with these urgent defence projects, restrictions must be placed on less essential types of construction.
My order No. 1 restricted use of steel for a few classes of construction, such as places of amusement, entertainment or recreation; construction for the merchandising, storage, manufacturing or processing of liquors, spirits, beers or wines; construction for the manufacturing or processing of tobaccos, cigarettes, cigars, carbonated beverages or confectionery; as well as use of steel for outdoor advertising signs. Order No. 3 adds to this list a wide range of other construction, including office buildings, hotels, printing establishments, banks, construction for the purpose of furnishing personal services, construction for the purpose of storing, distributing or displaying consumer goods, and construction of storage warehousing for personal effects.
The administration of this order has been delegated to the recently-established steel division of the Department of Trade and Commerce. Because of the critical supply situation for steel for construction projects, it will not be our policy to authorize projects on the restricted list where actual construction has not yet begun. In those cases where actual construction has begun and is well under way, it may be possible to authorize completion of the jobs, but each case will have to be considered on its own merits. It should be noted particularly that even where permission is given to complete a project on the prohibited list, this authorization does not assure availability of steel for the job, and it does not constitute any priority whatsoever for supply of the steel. It is most important that there be no confusion on this point.
Another point that probably requires some clarification is that order No. 3 restricts the use of steel materials for construction of a building. It does not restrict the use of steel for the manufacture of products such


as builders' hardware, doors, fixtures and mechanical equipment, even though such manufactured products may be incorporated in or installed in prohibited buildings. I understand that there has been a certain amount of misunderstanding on this point in connection with my order No. 1. The definitions in order No. 3 are intended to clarify this situation.
As I reported to the house last Thursday, a preliminary survey of investment intentions would indicate that private industry and government are aiming at a capital investment program in 1951 of $4,260 million, or thirteen per cent greater than in 1950. I might add that large projects are being announced almost every day, which will add to those figures. In my remarks I pointed out that it was unlikely that this objective could be attained, and that it would be necessary to restrict the use of steel and other strategic materials so that at least the more essential projects can be completed. Although order No. 3 certainly will help to assure supplies of steel for essential construction, it will not do the whole job. Further restrictions may be necessary, and I want to repeat my warning that those who contemplate construction projects, which do not relate closely to our defence effort but which are not yet on a prohibited list, should not commit themselves to building operations unless they know that they will be able to obtain the steel and other building materials needed to finish the project. It would be most unfortunate and a waste of valuable labour and materials for projects to be started and then have to be abandoned for lack of some vital material.
Because of the urgency of getting under way and completing projects that are essential to our defence preparedness program, it will be necessary to divert increasing amounts of steel and steel fabricating facilities to these top defence projects. We hope to accomplish this with a minimum disruption to less essential construction that is already under way, but it is unlikely that we can avoid altogether some hardships to those who badly need structures of the kind named in the prohibited list.


Mr. Macdonnell (Greenwood):: The minister referred to orders 1 and 3. Is there anything significant or that we should know about in order No. 2?


Clarence Decatur Howe: Order No. 2 was issued last December. I have really forgotten its effect, but I think the only restrictive orders are orders 1 and 3.



RECROSSXNG OF 38TH PARALLEL BY UNITED NATIONS TROOPS

[Stage Direction]
On the orders of the day:
Mr. M. J. Coldwell (Roseiown-Biggar):: should like to address a question to the Prime Minister, in the absence of the Secretary of State for External Affairs. Were members of the United Nations consulted about the reported recrossing of the 38th parallel by United Nations troops? If so, did Canada express an opinion, and what was it?


Righi Hon.  L. S. Si. Laureni@Prime Minisier: As to the first question, whether members of the United Nations were consulted about the reported recrossing of the 38th parallel, the answer is, not to our knowledge. In view of that answer, no reply is required to the second question.


Major James William Coldwell: If I may ask a supplementary question, has Canada made any representations to the secretary general or to the United Nations concerning reconsideration of the implied permission which was granted to the troops last October?


Righi Hon.  L. S. Si. Laureni@Prime Minisier: I would not like to give a positive answer, but I will take the question as notice and ask the Secretary of State for External Affairs to deal with it at an early date.


Mr. Graydon:: What permission have the
Chinese to be south of the 38th parallel?



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. G. K. Fraser (Peterborough Wesi):: should like to ask the Minister of Labour why some 500 or more Victoria, British Columbia, carpenters and labourers were refused unemployment insurance benefits when thrown out of work last April, through no fault of their own, but owing to a strike of truckers.


Hon. Milton F. Gregg (Minisier of Labour):: The commission was of the opinion that the men concerned lost their employment due to a labour dispute. That ruling was challenged; the case was appealed, and the umpire ratified the ruling of the commission. I shall be happy to send the hon. member a copy of the decision.


Gordon Knapman Fraser: I wish the minister would do so, but I should like to know if there is any further appeal open to these men.
Inquiries of the Ministry


Milton Fowler Gregg: I believe that question will be answered when my hon. friend gets the copy of the decision.



EMBARGO ON EXPORTS TO UNITED STATES

[Stage Direction]
On the orders of the day:
Mr. J. A. Ross (Souris):: Has Canada placed an embargo on the export of hides and skins from this country to the United States, and if so, why?


Clarence Decatur Howe: A temporary embargo has
been established. The officials concerned with price control in the United States have placed a temporary hold on the distribution of hides and skins in that country. When the hold order was announced, buyers from the United States came to Canada and not only bought all the hides offered in our market oyer a period of time, but paid a price very much above the United States ceiling price for those hides. It was felt, and it was agreed in Washington, that a temporary embargo by Canada that would protect the action taken in the United States would be in the interests of all concerned. It will at the same time protect the supplies of leather for boots and shoes that are being ordered in great quantity for the Canadian servicemen.



MANPOWER


[Stage Direction]
On the orders of the day:
Mr. A. Earl Catherwood (Haldimand):: Mr. Speaker, has the Minister of Labour, in deciding upon the selection of one or two women to serve on the national advisory council set up by the Department of Labour given consideration to the appointment of a representative of the rural women of Canada?


Milton Fowler Gregg: I have given consideration to this question. As the hon. member knows, there are a great many women's organizations, both rural and urban. Those of us in the house who represent rural constituencies are well aware of the excellent work being done across the country by the women's institutes of Canada. These institutes come under a national organization known as the Federated Women's Institutes of Canada Inc., of which Mrs. E. E. Morton, of Vegreville, Alberta, is national president. In conversation with Mrs. Morton we have assured each other that in the immediate future it will be quite possible for the women's institutes across Canada to give expression to their ideas and aspirations
254	HOUSE OF
The Address-Mr. Ferguson through the existing members of the council. I believe I can say the same regarding any other large rural women's organization in the country.



SPEECH FROM THE THRONE


[Stage Direction]
The house resumed, from Friday, February 9, consideration of the motion of Mr. W. H. McMillan for an address to His Excellency the Governor General in reply to his speech at the opening of the session, and the amendment thereto of Mr. Drew, and the amendment to the amendment of Mr. Herridge.
Mr. J. H. Ferguson (Simcoe North):: Mr. Speaker, on Friday I was discussing one of the phases of the negligence of this government, having to do with immigration. I believe that this government's lack of an immigration policy is responsible for a great number of the shortages existing in this country today. Knowing the type and calibre of the persons who have come to Canada in the past, and their contribution towards the building of this country, I feel confident-as a matter of fact I am positive-that if this government had done a real job on immigration during the past five years we could have had a million willing and competent workers today for the farms and for all classes of industry. We need these people. Particularly do we need British immigrants, people who speak our language. There is no difficulty in telling a man from any part of the British isles the manner in which a certain job is to be done, especially if he is a trained artisan.
It costs the taxpayers of this country about $5,000 to educate a man or a woman. If we bring to this country people who have been educated by the European or British governments, we relieve our taxpayers of this burden, and, in most cases, receive the benefit of the presence among us of a competent person who contributes his share towards the building of this country. The people of Ontario remember with pride and admiration what was done in this regard by the then premier of the province, now the leader of the opposition in this house, when he brought to Canada ten thousand British immigrants. In checking the records showing the amounts of money which these people brought with them, I found that it totalled about $27 million. Under this plan, ten thousand British immigrants paid their way. The plan was formulated almost against the opposition of this government's department of immigration. As I have said, these people have contributed $27 million to the coffers of the Dominion of Canada.


Fortunately for the farmers of Ontario, again owing to the efforts of the present leader of the opposition, ten thousand Dutch farmers were brought to the province of Ontario. They have proven to be a godsend in the production of foodstuffs for Canada and the rest of the world. The department of immigration should be the focal point upon which this government concentrates its efforts. This government should put forth a superhuman effort in order to assure the people of Canada that this department will function as it should function, and put Canada, with its tremendous resources and its vast territory, in a position to fill the crying need for labour of the right calibre.
I shall turn now to the Minister of National Defence (Mr. Claxton). It is interesting to note that on June 12, 1942, this statement was made by the hon. gentleman who is now Minister of National Defence, as reported at page 3312 of Hansard:
If, on the other hand, Canada fails by even a hairbreadth to discharge her full duty to the united nations, to humanity and to herself, she would be dishonoured . . .
This statement should be recalled when we look at the position in which the people of Canada find themselves today. In this morning's newspapers we read that that famous and gallant regiment, the Princess Patricia's light infantry, is about to enter the front line in Korea. Here is history repeating itself, just as surely as we are sitting in this House of Commons. If these men, who volunteered to uphold the honour of Canada, run into any fighting, it will be history repeating itself; they will be short of reinforcements from Canada. To realize the truth of this, one needs only to reflect on the first real battle in which the Canadian army engaged at Ypres in 1915, when approximately fifteen thousand fighting men were wiped out in about twenty-four hours.
There are no strings attached to soldiers in the fighting line. You cannot tell them to go forward and then pull them back by the strings if they are surrounded by the enemy. How dearly we would have loved to be able to pull back these men at Ypres, who were surrounded by the enemy because of the breaking of certain of our allies on our left. The Germans surrounded the Canadians and marched them oil by companies:, that is, those who survived the unseen gas attack. If these gallant men of the Princess Patricia's light infantry are the victims of such a slaughter, where are the reinforcements for them? The Conservative government of 1914-18 was lax in securing adequate reinforcements. Men had to serve two terms'

in the front-line trenches, in water up to their knees. We who served in that war said that if there were ever another war we would see to it that these conditions were not repeated.
What did we find in 1939? We found-and you know it is true, for the facts were divulged by a gallant member of this House of Commons, Colonel Ralston-that there were no reinforcements for our men. This hon. member resigned from the ministry as a protest to the Liberal government against the lack of reinforcements for the fighting men in Italy. He knew the facts, because he had visited the scene. History did repeat itself. The same dilatory methods as those used by the Conservative government in 1914-18 were continued by this government. But this government had the example of the results of lack of reinforcements, and paid no attention to it. This government had the example of the heartfelt calls of the fighting soldiers for more reinforcements, for a bit of needed rest, during the war of 1939-45. So far their cries and their demands for preparation have been allowed to go unheeded. One does not need to be a military expert to realize what will happen in Korea if our poor soldiers do their part, as they will, and fight as all Canadian soldiers have always fought, with no thought of retreat when surrounded. They will carry on the traditions of Canadian fighting men. When what may be the remnants reassemble back of the line, and they are asked to go up into the fighting line again without adequate support, what will they think? They will think as we thought in the war of 1914-18, and as the boys thought in the war of 1939-45: "I suppose our parliament is doing the right thing." You and I know that this parliament did not do the right thing. The Tory parliament did not do the right thing. But let it not be said of this government that it did not do the right thing.
The hon. member for Fraser Valley (Mr. Cruickshank) stated in this house last week that we were proud of the efforts of Canadian soldiers in the last two wars. That is true. But we are not proud of the reinforcement effort put forward by either the Conservative government or the Liberal government in the past two wars. Our armies made history for themselves, and our factory workers made history for themselves, but with little semblance of guidance or encouragement by the present government.
We can easily remember the request which came from the British government for the opportunity to train British pilots in this country; and we can recall, with not a great deal of pride, the response that came to that
The Address-Mr. Ferguson request, and how late-but fortunately not too late-it was acceded to. We recall that those marvellous boys from the British isles came out to Canada and trained, returned to the British isles and flew aircraft in all parts of the world in order to crush the curse of Hitlerism. Let that situation not occur again. Every member of this House of Commons has a duty to perform, even those on the Liberal benches; and it is a duty that the people sent them here to perform. Irrespective of politics I suggest that hon. members go to their cabinet ministers and say: Please let us not have a repetition of the past. We are at war. Our men are going into battle today. We are stiff allowing certain factories to make non-essentials. We are still permitting a communist rally in Massey hall in Toronto, in spite of the fact that communist soldiers in Korea are murdering wounded men. We need no proof of that. We know the type and calibre of men we are dealing with so far as our enemy is concerned.
We are gradually pushing our men into the front line. Are we in Canada prepared for this situation? Do you feel in your hearts that it is the right thing to do to have these men in battle and at the same time to permit Tim Buck to eulogize the communists and their fellow-travellers, for them to cheer the remarks made by that man and for him to delude the minds of Canadians by the thousands when we are at war?
The backseat generals in the Dominion of Canada have been prone to criticize a great man, General MacArthur, who is carrying out a job with men who are not trained sufficiently to enter battle. He is carrying out a job against as ruthless an enemy as the world has ever known. General MacArthur should receive praise from the lips of every person this side of the iron curtain for the great show of generalship he has made on behalf of all the nations and peoples of the United Nations. General Eisenhower, a man of whom we are very proud, has now taken over the organizing of the defence of Europe. This city of Ottawa had the honour of having this great man visit it. I hope that when he delivered his secret messages to the cabinet, he impressed on their minds the seriousness of the situation in the world today, with the threat of the communist hordes. If they will only act as men capable of filling the positions they occupy, his visit was well worth while. The people of Canada are waiting patiently to see immediate steps taken, with no further procrastination, with respect to things that have to be done, that should be done, and that can be done. In my opinion this government will go down in history and be known
256	HOUSE OF
The Address-Mr. Sinclair as the "dio-nothing Liberal government". It is about the worst of its kind that we have ever known in Canada.


Mr. James Sinclair (Coasl-Capilano):: Mr. Speaker, my first words in this debate must be words of congratulation to both the mover (Mr. McMillan) and the seconder (Mr. Breton) of the address in reply to the speech from the throne. As they were speaking I felt very close to them. One reason was a physical one, in that I sat between them; and in the second place, eleven years ago I had the same pleasant task myself. I was not surprised at the excellence of the quality of their speeches, because men who could come here, one with as big a majority as that of the hon. member for Welland (Mr. McMillan), and the other by that most wonderful of all political accomplishments, a political acclamation, are obviously men who are held in high repute in their constituencies. What I admired about them, sitting as close to them as I do, was the coolness and calmness with which they presented their maiden messages to this house. I think they will have fine careers in this chamber.
No doubt one of the reasons why they were able to acquit themselves so well when for the first time they spoke in parliament in the presence of these veterans of so many political battles was the advice they had undoubtedly received from the more senior members in their areas. I myself can remember getting excellent advice when I was chosen for this task and sought the counsel of one who was then the senior member from British Columbia; I refer to the late Ian Mackenzie. He gave me excellent advice, although I did not follow it as well as I should have. Had I done so, my maiden speech might have been more successful. In any case he concluded by saying, "Jimmie, there will be another thing you will need for your speeches. You will need a small trunk and a big trunk". I said, "What for?" He said, "A small trunk in which to keep the speeches you actually make in the House of Commons, and a big trunk in which to put all the speeches that you prepared for delivery but which for one reason or another you did not make." Well,
I didn't get those trunks; but if I had them today perhaps I should put the speech which I am now about to make in the bigger trunk, because it was prepared for an occasion which has not developed. I try to be a good parliamentary assistant, to earn the pay about which the hon. member for Fraser Valley (Mr. Cruickshank) talks so much, by following very closely in the House of Commons the speeches and activities of hon. members relating to our own Department of Finance. I also follow the speeches they make outside the house. There are some members who are as


quiet as field mice when they are in the House of Commons surrounded by their equals, but when they get back in the bosom of their own ridings and with their political associates, they roar like lions. There are other members, however, who are vigorous in the House of Commons and equally vigorous outside the House of Commons. I watch their speeches outside with especial interest, because what they say just before a session is probably what they are going to say during the session.
It was with this attitude that I read with great surprise a Canadian Press account of a speech made by the leader of the opposition (Mr. Drew), who I am sorry to say is now absent. I sent him a note just a moment ago telling him that I was going to devote some time to him, and hoped he would stay. Perhaps I shall be forgiven if I seem to be attacking him in his absence. Probably he will come back.


An hon. Member:: He will be back.


James Sinclair: In a Canadian Press account of October 25 from Saskatoon, the following appears:
Saskatoon, October 25 (CP)-George Drew, national leader of the Progressive Conservative party, said Tuesday night that the government can save $500 million a year by eliminating wasted spending. It would help combat the growing dangers of inflation.
Mr. Drew said in an address that savings proportionate to those outlined for the United States government by the Hoover commission could be made by Ottawa. This could be accomplished without interfering with necessary services and defence expenditures.
Well, my first reaction to that was, this must be a typographical error. It appeared in the Vancouver Sun. I looked up some other papers to see if I could see this Canadian Press account. I looked up the Saskatchewan papers. Sure enough, it was not $5 million; it was not $50 million; it was $500 million- half a billion dollars.
My second reaction was: how unfair to parliament! We have heard those speeches by many of the Conservative members, especially addressed to my minister, the Minister of Finance (Mr. Abbott). We have heard expressions about contempt of parliament when he at one time had to go on the radio between sessions and tell, not his party followers but all the people of Canada, about the changes in taxation which would have to be effected.
The leader of the opposition is also paid a salary. He too has responsibilities to parliament, and surely if in that silver-thatched head of his he has knowledge of how to save half a billion dollars a year it should have been given to parliament during the last

session. It should have been given to the public accounts committee during the last session. It should not be given only to a group of his party followers out in Saskatoon, after the session is over.
My third reaction was: how unfair to the people of Canada; because, as he says, one of the best ways to combat inflation today is to curb all unnecessary government spending. The people of Canada are the ones who have suffered most if he could, as he said, have pruned $500 million from this year's estimates.
My fourth reaction was a personal one. How unfair it was to the hon. member for Greenwood (Mr. Macdonnell), the financial critic of the Tory party. On occasion during budget debates I may have been a little hard on the hon. member. I know the difficult position he is in. The minister presents his budget, and a week later the hon. member replies. In the interval between, the people of Canada have shown acceptance of the budget, and he has then the very difficult task of criticizing. If the leader of the opposition had only told his trusted colleague how he could make this $500 million saving, what a speech he could then have made last session! He could have told the Minister of Finance not just how to raise the $50 million deficit, but how to acquire a surplus of $450 million as well. Well, I was sure that one question the leader of the opposition would raise immediately parliament opened was this tremendously important domestic issue, the saving of $500 million on our present estimates. Therefore I decided to do some work. I have done quite a bit of work on it, much more work than is indicated in the documents I have in my hand.
If I had any doubts whether or not I should work on this, those doubts were certainly resolved by a very strong editorial in a great Conservative paper in my home town in British Columbia, the Vancouver Daily Province, of October 27, which reads as follows:
Mr. Drew makes a serious charge.
Mr. George Drew, leader of the Progressive Conservative party, speaking to a group of young workers of his party at Saskatoon this week, gave it as his opinion that the federal government could save $500 million a year by eliminating waste spending.
If Mr. Drew was speaking soberly and responsibly, he will have some grounds for his charge that half a billion dollars a year is being wasted in Canada. He will be able to go into detail-to give chapter and verse. And the people of Canada, who have a practical interest in federal expenditures, because it affects their personal spending, will listen to the indictment and demand an answer.
The charge that the Canadian government is wasting $500 million a year is a very serious charge 80709-17
The Address-Mr. Sinclair indeed: for, besides being a charge of gross extravagance, it is a charge of incompetence in administration. Half a billion dollars is one-fffth of the Canadian budget. It is twenty cents on every dollar collected in taxes from the Canadian people, who though they are prosperous enough at the moment, have no such sums to waste.
Extravagance in government is bad enough at any time, but at a time when prices are going up and dollars are going down in value, it is doubly serious. It accentuates the inflationary tendency. Since the war, the fund of purchasing power available in Canada has increased out of all proportion to the volume of goods available for purchase.
That is the stuff that makes for inflation. That is what sends prices up. And here, if Mr. Drew is correct, is an extra, irresponsible fund cf half a billion dollars, flying about uncontrolled like a loose cask on a ship's deck in a storm, and doing damage wherever it strikes. Unquestionably, something should be done about Mr. Drew's charge. Mr. Drew should see that something is done.
Well, I sat here during this debate on the motion for an address in reply to the speech from the throne. I heard the leader of the opposition speak very carefully. He actually read his speech at great length, but there was no mention at any time of this half a billion dollars. I thought perhaps I should put this speech in the big trunk, but then I thought, after all, because of the work he has put me to, I should at least give to the members of the House of Commons a synopsis of my work on this matter of government spending.
It is true that I have access to a lot of information through the Department of Finance, but I am not going to use it. I am going to use the documents which are available to any member of parliament, the estimates of Canada for this year. Let us look at these. First of all, what is the budget? The main estimates were $2,309 million, Adding the supplementary estimates we get the gross bill of $2,389,106,000. It is on these amounts that economies and savings must be effected.
The leader of the opposition was the premier of a province, so he knows that all of the formal budget is not at the disposal of any government to slash. There are many of these things called statutory appropriations, which are payable by law. There are great transfer payments from one government to another government, from the federal government to provincial governments or from the federal government to municipal governments, or to individuals as pensions and allowances and interest.
Then there are other things. There are some items which the Tory party has approved. As a matter of fact, they have said that some items were much too low. Let us take them one by one. First of all, there is the Department of Agriculture. There are many good services there, some of which the Tory farm members have asked to

The Address-Mr. Sinclair be increased, but I will dismiss all them. I shall pick out only one or two statutory items. The first is freight assistance on feed grain. Conservative party farm members in the east have always voiced support of these. They amount to $5 million and are a straight transfer payment. If any Tory farm member in the east is opposed to that, let him speak up, and I will cut that out.


Gordon Knapman Fraser: You will cut that out? I thought it was the minister who did that


James Sinclair: I mean that I will cut it out of the calculation I am making. I have a few words especially for the hon. member for Peterborough West, if he will contain himself.
I will pass over the rest of these very important agricultural services and say that perhaps there may be some ground for the leader of the opposition's charge that there are some savings to be made there.
I now come to the Auditor General's department, and the amount there is $579,000. Well, that is one department that the leader of the opposition has shown in the public accounts committee that he thoroughly agrees with. He holds it up as a model for all departments so I will take it off as an approved item.
We come next to the chief electoral officer's department. I will not touch that. Then we come to citizenship and immigration. I will not touch that, but leave these whole departments for the leaders half billion economies. Then, there is the civil service commission. I will leave that. In the absence of the hon. member for Peel (Mr. Graydon) we will pass over external affairs.
Then, finance: this is undoubtedly the most frugal and careful of all government departments.


Some hon. Members:: Oh, oh.


James Sinclair: In our list we have two or three things which most certainly are statutory. I will only include them. The first of these is the cost of financing the public debt of Canada, the sum of $433,045,000, a straight transfer payment. These are payments of interest paid to the holders of war bonds and the holders of other government bonds aoross this country. That is money going to the people of Canada, either directly as their own savings, or indirectly through the banks and the insurance companies or investing firms who invest their savings in these bonds. The only saving here could be made by repudiation.
I never heard the Tory party say they would repudiate that. Then, we have subsidy grants to provinces. The first are set by the British North America Act. The second are the tax rentals to the provinces, which are

again straight transfer payments. Both the Conservative leader in British Columbia and the hon. member for Kamloops (Mr. Fulton) say these are too low. So we can include that.
Then there is the transitional grant to Newfoundland, another transfer payment. The hon. member for St. John's East (Mr. Higgins) has certainly complained about that being too low. All these provincial payments amount to $106 million.
Then we have grants to municipalities in lieu of taxes on crown property. That is a straight transfer payment of $1,665,000. There is no administration included in any of these transfer payments. If the hon. member for Carleton (Mr. Drew), for instance, will say that Ottawa is getting too much-which he has never said-then I will cut it out of my calculation. However, I do not think the hon. member for Carleton county will say that the municipalities-especially the city of Ottawa-are getting too much in lieu of taxes.
Then we can pass over the fisheries department. I will not take anything out of that, but leave it all for the economies of the leader of the opposition. Maybe too he thinks we can get along without the governor general and the lieutenant governors. So I will leave that item out. Next, the insurance item is $343,000, but we recover $285,000 of this in fees for services, which I will include in my total.
We then come to the Department of Justice. I will only include the statutory payments in that department. The payments in respect of judges' salaries and allowances add up, all told, to $3,088,000. We have heard criticism in the house from the Conservative lawyers to the effect that the judges are not paid enough. Since the hon. member for Wentworth objects I will cut it in half-I am very anxious to accommodate! We thought the considered opinion of all the lawyer members in the house has been that our judges are underpaid.
Then we come to labour-and this is found at page 25. The first of these transfer payments comes at page 24 and makes reference to the contribution by the government for workmen's compensation for its employees, payable to provincial workmen's compensation boards across the country. This amounts to $840,000, again a straight transfer payment separated from administration No one has suggested that the government should not protect its workers in the same way as industrial workers are protected.
We then come to unemployment insurance -again not the administration item, but the actual contribution of government funds, amounting to $23 million. The Conservatives in 1940 when the act was introduced were not

too anxious about unemployment insurance but they do not say that today, in public.


Gordon Knapman Fraser: I protested today. I think we have not enough. I referred to those five hundred men.


James Sinclair: And the hon. member could not give me a better example. He now wants more money, not less, paid as unemployment insurance.


Gordon Knapman Fraser: I want these men to get what is coming to them. I want them to get a fair deal, and not to be squashed the way they are today.


James Sinclair: Everybody else wants it. Then we come to unemployment relief for Newfoundland, amounting to $1,500,000, once attacked bitterly by the hon. member for St. John's East as inadequate.
Then we come to legislation-and we are getting right down to parliament now. I will not talk about administration costs. I will not discuss the cost of maintaining the House of Commons and the Senate, and will refer only to the statutory provisions for the salary of the leader of the opposition (Mr. Drew), the indemnities paid members of the House of Commons and the Senate, and the travelling allowances.


James Arthur Ross: And don't forget parliamentary assistants.


James Sinclair: No; I am away ahead of you on that. I am not including in my calculation either the $15,000 to the Prime Minister, the $10,000 to the cabinet ministers or the $4,000 to parliamentary assistants although no one thinks the Prime Minister or cabinet are overpaid. I know that the hon. member would be most anxious to make at least one saving in that respect. All right; let us say we parliamentary assistants are overpaid. All I am including is the $4,000, and the $2,000 allowance paid the hon. member for Souris for coming here to Ottawa. I doubt whether his leader would want that cut out.
Then I come along to the mines branch. Again I will leave out everything except statutory payments. If there is one thing that we have heard from the Conservatives from Bay street, it is that we should support a gold subsidy. This amount is $8 million, again a straight transfer payment. Certainly we have heard nothing from the leader of the opposition saying that he wants this item reduced or cut out.
Then we come to the Department of National Defence. We have heard a good deal from the opposition about the inadequacy of our preparations for defence, that we are not doing enough, so this item seems too little. In any case the leader of the oppo-
80709-17J
The Address-Mr. Sinclair sition did exclude that. He said that his statement was exclusive of national defence, so I will add it in, $419,985,000.
Then we come along to national health.


Mr. Lennard:: We could cut that down.


James Sinclair: Possibly. First statutory payment is family allowances. This is not for administration, but just for payments to the mothers of Canada and they amount to $307 million. We have just heard the hon. member for Wentworth (Mr. Lennard) say that he would cut them out.


Frank Exton Lennard: No, I did not.


James Sinclair: Yes.


Frank Exton Lennard: I said that the estimates for the Department of National Health and Welfare could be cut down. I did not refer to family allowances at all. And while I am on my feet I would refer to some of the stupid advertising that is being done by the Department of National Health and Welfare.


James Sinclair: I have been reading all these things in which the hon. member would make a saving, and I would just refresh the memory of the leader of the opposition by referring to what he said when family allowances were first introduced. This was the opinion of the leader of the opposition when he was premier of Ontario, as quoted in the Globe and Mail, August 3, 1944:
This bill is an outrageous bribe offered to the people of Quebec immediately before an election upon which Mr. King's last chance of political survival depends.
And then, speaking as the leader of a provincial government, he said on a C.B.C. broadcast, Aug. 9, 1944:
But I assure you that the government of Ontario intends to do everything within its power to make sure that this iniquitous bill does not go into effect.
Well, if he will say, or if one of his colleagues will say, that they want this $307 million a year, which represents a redistribution of wealth to the children of the nation, cut out, then let them say so. Otherwise I will include it.
Then we get along to old age pensions. This is an amount of $103 million. Again this particular item has nothing at all to do with administration. It is actually a transfer payment of $103 million to the provinces. Through this amount we pay our three-quarters share of old age pensions. The only criticism we have heard from any quarter of the house has been that it is too low, not that it is too high, so I include it.
Then we come to the post office-and I am sorry the hon. member is not here, because the post office department was the one department for which he had a good word. On

The Address-Mr. Sinclair August 30, 1950, as reported at page 27 of Hansard, he gave his thorough approval. So I believe we can include all this, with the exception of $1,750 which he thought was too much for the little posters he showed us at the last session, urging business in Canada to make better use of the mails to get their advertising program over. If there is one organization in Canada that should certainly use this service to get their program over it is the Conservative party. The amount for the post office department is $85,663,000.
Then we come to the Department of Resources and Development. The one statutory payment here is $20 million, for the trans-Canada highway. There were many Conservative members, of course, including the hon. member for Vancouver-Quadra (Mr. Green), who think it is not sufficient. No one has thought that too large.
Then we come to the R.C.M.P., and again I will take only the one statutory item, an amount of $1,188,000 for retirement pensions. We all think, I believe, that the pensions of the R.C.M.P. should not be lessened-unless of course, the Tories want to cut the scale of pensions. Unless they do, I will leave it at that.
In all the great Department of Trade and Commerce I will take just the one statutory item, dealing with coal subsidies and coal freight assistance, totalling $4,850,000. Will the hon. member for Cumberland (Mr. Black), the hon. member from Annapolis or any other Conservative member from any of the maritime provinces, perhaps the member for Royal, say that this is a waste of money? If he will, then I will cut it off from my figures.
For all the Department of Transport I will take just the statutory payment under the Maritime Freight Rates Act totalling $7,319,000. Does any maritimer want this cut out? And we find $500,000 in that department for the railway grade crossing fund. We spend that each year, and in view of the grade crossing fatalities, we should be spending more. And unless the hon. member for York West (Mr. Adamson) who has spoken so much on it wants to have it cut down, we will leave it as it is. Finally there is the Department of Veterans Affairs. If there is one thing we have heard in this house again and again and again, it is the Tory criticism that we are spending too little on every aspect of veterans affairs, that we have not been generous enough. Since they want no economies here I will include the $198,881,000. Now all these statutory payments and the things that the Tory party has said are sound, and on some of which we are criticized for not spending enough, add up in the main estimates to
[Mr. Sinclair.l

$1,734,655,000. Mind you, we have the supple-mentaries, and I added their total to the figure of gross expenditure I gave for the main estimates. Picking out in these sup-plementals the statutory items, and adding the cost of the Manitoba flood and the Rimouski and Cabano fires-and I do not think the Tories said that was wasteful-we find another $21,161,000 of statutory payments in the supplementals. Therefore this brings the whole area of controlled expenditure, controlled by statute, controlled by thorough approval of the Tory party, up to the sum of $1,745,816,000. If we subtract that from the gross of our main estimates and our sup-plementaries, the figure of $2,389,000,000 to which I referred, we get left $643,290,000 as the area for all government departments in which there are controllable expenditures of every sort, and on that the leader of the opposition says he can save $500 million-not 20 per cent but 80 per cent economies on all the many activities of government in the federal field.
Of course hon. members know how he is going to justify it. "Hoover commission" are going to be the great words. If we could only make a saving similar to the Hoover commission, he will say, all would be well. I have done quite a bit of work on the Hoover commission. I would not have done so unless the hon. member had made that speech, but I am glad I did. I learned a lot. First of all, is it a good basis of comparison to compare our type of government, our cost of government, with that of the United States? Very few political economists of repute have ever thought that was true. One of the great works is that of the late Lord Bryce, "Modern Democracy." It is an excellent analysis of the differences between England, the United States and ourselves.
The United Kingdom is a small, compact country with a well-established government, most of the public facilities long since built up and paid for, a unitary form of government, just one level and then the borough down below, and parliamentary control over expenditures. It is a naturally efficient way, an excellent way of government. As for ourselves, we are a comparatively new government on the federal system. We have a comparatively small population, spread over an enormous territory, which naturally makes for expense in administration; an expanding economy demanding every day new and better public facilities to serve our expanded agriculture and expanded industry. We have a good civil service. We are getting away as fast as we can from the old evils of political patronage. There are few political appointments today.


James Arthur Ross: Since when?


James Sinclair: Then we can point to the fact that we have the British parliamentary system of control, the treasury board, the Auditor General, the comptroller general, the committee of the whole house, and the public accounts committee if the opposition will make it work. In a system like ours there may be however more opportunity for overlapping than in the United Kingdom, and for more costly administration.
But when, we turn to the United States we find a very large population in a large country. That in itself makes it tremendously difficult to have a compact efficient administration. It also is a federal and not a unitary system. There is separation of the legislative body from the executive, both with powers of political appointment, a weak civil service compared with ours or the British, no auditor general, and no government responsibility for initiating money legislation. Any congressman, any senator or the executive branch can initiate such money legislation. They take their politics much more seriously in a political way. There is a great change in ordinary civil service positions when there is a change of the party in power as the result of an election, all adding to the cost of government.
Finally-and I believe this was mentioned long ago by Lord Bryce-there is the American Tammany hall maxim, a maxim which is used a great deal, and which perhaps still influences United States politics too much, that for successful re-election you must never vote for a tax bill and you must never oppose a public expenditure. When you make that comparison, you will of course see that there will be more need for savings by improving the administration under the United States system than under our system, and probably more need under our system than under the British system. However, let us go ahead with the comparison despite the difference in position.
I have done a lot of work on the Hoover commission, and so far the most optimistic report I have been able to find is that published by the civil service assembly, the group most strongly in favour of the Hoover commission in volume 17, No. 1 of their journal for January, 1951. It points out that, counting everything they possibly can, taking credit for all savings, they have effected savings of $2 billion in a budget of roughly $40 billion, or five per cent. Our budget of course is $2,500 million, and if our economy were the same, which it is not, if our government were the same, the savings would be $125 million, not the $500 million of the leader of the opposition.
The Address-Mr. Sinclair
More than that, the government rate of spending in the United States is very much greater than ours. Last year they spent $266 a person, and we spent $164 a person. The leader of the opposition will say more will be saved when all the commission report is implemented. I find that this blind faith in commissions, which the leader of the opposition has so far as the Hoover commission is concerned, is not shared by all people. For example, I remember that he himself started the Hope commission three years ago when he was premier of Ontario. When the Hope commission brought down its report a little while ago Premier Frost, the Conservative premier of Ontario, had this to say on February 7:
We are in no way bound to accept the recommendations of the commission.
The Conservative Ottawa Journal said in an editorial on February 9:
Premier Frost is very wise in not adopting the major recommendations of the Hope commission. He is in no way bound to accept the commission's proposals. Royal commissions are set up to report and recommend, not to make laws.
If Democratic President Truman is going to pay no more attention to the report of Republican ex-President Hoover, than Conservative Premier Frost pays to Conservative Premier Drew's royal commission, I do not think the hon. leader of the opposition can expect much more in the way of economies.
I want to finish my comment on what the leader of the opposition has said with a challenge only to him. I challenge him to come into the house, to come into the public accounts committee, and, not speaking widely about the Hoover commission, not speaking vaguely of percentages but as the Province editorial said, chapter and verse, item by item, say what services can be dispensed with and what employees can be dismissed. Then I will total his figures, and I shall be pleased if he can make this saving of $500 million out of the $667 million which is controllable. The people of Canada will be pleased. The government will be pleased.
There is one other thing I should like to say about him before I leave him. I should like to give him a little advice. He is not here, but he will read it in Hansard. He would not take it anyway from me.


An hon. Member:: Who would?


James Sinclair: There is a wonderful series of essays by Thomas Carlyle on hero worship. Naturally the leader of the opposition's followers try to pattern their conduct on their leader, just as I probably try to pattern my conduct on that of the Minister of Finance, a good model, though I am not very successful. There is one young member in

The Address-Mr. Sinclair particular in the opposition who is patterning himself very closely on his leader, the young and gallant member for Broadview (Mr. Hees). The leader of the opposition has the responsibility of making sure that the pattern this young member is following is a good one. I do not think it is such a good one right now, and we see evidence of that in the house.
As I pointed out, the leader of the opposition is careless with figures. His young follower, who came immediately after him in the debate, is also careless with figures. I say he is careless because in his speech, to be found at page 61 of Hansard, he compared our armed forces with those of Great Britain, and said that the armed forces of Great Britain totalled 1,023,000 men. Of course he may have authority, but I should like to refer to another authority, Prime Minister Attlee, speaking in the British House of Commons on January 29. His remarks are to be found in Canadian newspapers of that date, and in the airmail edition of the London Times which was available in the reading room on the 30th. Prime Minister Attlee said that in the last white paper strength of the armed forces, men in uniform, was 682,000 but that by April they hoped, by calling up many more reserves and extending compulsory training, to get it up to 800,000. The hon. member for Broadview is still not quite as reckless as his leader, but he is inclining that way when 800,000 next April is quoted as 1,023,000 today.
The second point is this matter of being careless in the basis of comparison. The leader of the opposition compares Canada with the United States. He says that our governments are the same, and the overlapping and inefficiency are the same. I say that is wrong. His young follower then compares Great Britain's manpower problem and our manpower problem and gives that as a reason why we are failing to put enough men in the army.
There are great differences on any basis, but let us look at Britain as far as manpower is concerned. They cannot feed themselves. The fifty thousand farmers who would be required to grow wheat in Britain, if they could grow wheat there, can be put in the army. We feed ourselves, and in addition we have to take fifty thousand men out of the manpower pool and put them on the prairies to grow wheat for Britain, plus all the men needed to service these farms and transport the wheat. Then we have seventeen thousand men up in Sudbury in nickel production, much of which goes to Britain. That takes men from our supply which Britain
(Mr. Sinclair.]

does not have to do. Ten per cent of our working force in British Columbia is employed producing timber for Britain today. The same thing is true of our base metals, oil, newsprint. These are things they cannot do for themselves, and of course that is why our scale of participation must be different from that of Britain. Of all the North Atlantic countries, Canada and the United States have the greatest resources; and in this cold war that is going on at the present time the production of equipment and the development of resources to get ready to defend ourselves are the overriding factors. We must divide our manpower between our resources and our armed forces for the best advantage of all our allies.
My hon. friend's leader skirted all around this manpower issue, both the conscription and compulsory service issue, as was pointed out by the hon. member for Fraser Valley (Mr. Cruickshank). So did the hon. member for Vancouver-Quadra (Mr. Green) and the hon. member for Nanaimo (Mr. Pearkes). Out on the west coast we heard different statements by all three Conservative members, trying to kid the Canadian Legion into believing that they were endorsing their program. Although there is not much need for me to do so, I believe this would be a good time to place my views on record in this respect. Hon. members will remember that last fall the leader of the opposition (Mr. Drew) very kindly and thoughtfully quoted from one of my old speeches, made in 1944, in which I gave my stand on conscription. I said I still believed every word of it, but of course he did not commit himself at that time. I was proud of the brave, straightforward statement the Prime Minister made at the start of the debate on manpower. I was ashamed of the scuttling and scurrying of the Conservative party on the same issue.
I believe with the Prime Minister the use of manpower for the development of our resources and industry to help build up the North Atlantic defences is the overriding need today; but I also believe, and I have told the Prime Minister, that while we may not, because of labour shortages, be able to drain off our eighteen and nineteen-year-olds for two years of compulsory service as do other countries, we can begin such training without losing manpower from industry. First compulsory service in the cadet corps of our high schools. I had that training, and I am sure it did me no great harm. Those going to our universities are indirectly in receipt of state assistance for at least half their tuition and they also should be asked to take compulsory training as their contribution in return. Then our young men who are all working today in industry, and who

should stay working, and who spend their evenings at hockey games or basketball matches, at the movies, at dances and in pool halls, should be called on for their duty and take time out from those activities and spend two or three nights a week during the winter and week ends during the summer training with the reserves, thus getting some training but not at the expense of our manpower requirements for industry.
I see my time is almost up; I have only six minutes left, and I still have a great deal of material. In these six minutes I will not have time to cover everything I had prepared, but I would like to suggest what members of parliament can do to help keep down the cost of government, because that is a tremendously important thing just now. I challenge the leader of the opposition (Mr. Drew); I do not challenge any other hon. member. The Minister of Finance (Mr. Abbott) asks the co-operation of every member of this house to cut down civilian expenditures in every possible way. Last year I gave the house examples when I told hon. members what the treasury board does in holding down government spending. We have all these very desirable expenditures, for public facilities and services suggested by hon. members or by communities in the country which they persuade the appropriate minister to include in his estimates. The ministers go before treasury board, and desirable though these projects may be they are not approved. Of course the Minister of Finance is the awful ogre who is blamed for stopping the member or the community from getting this very desirable service. Well, somebody has to do that job and the taxpayers of Canada should be grateful to the minister for holding the line. It is not a matter of getting rid of superfluous services in this country; there are so many desirable things which need to be done in this expanding nation but treasury board has to decide which of those things are most desirable in view of funds available.
How can members help? Well, I think the first way in which members can help is by using some restraint in their own demands upon ministers and the government for more facilities and services for their ridings. I remember last year, when the Minister of Finance placed restrictions on capital expenditures for new public buildings. Who were the first to bob up? They were the Conservative member for Queens (Mr. McLure) and the Conservative member for Winnipeg North Centre (Mr. Knowles)-


Some hon. Members:: Oh, oh.


Stanley Howard Knowles: I am sure the hon. member wants to put the record straight. I belong to the C.C.F.
The Address-Mr. Sinclair


James Sinclair: I will certainly put the record straight, but those were the first members to bob up. They said, "Yes, we agree, but we hope that will not affect the post offices at Charlottetown and Winnipeg." Economies always begin in the ridings of other members. I have prepared something of an analysis of what hon. members have asked of parliament; and I am sorry the hon. member for Van-couver-Quadra is not here, because he was one of the best examples of an economy-minded Conservative. I went through Hansard for 1949; the index for 1950 is not ready yet so I could not search 1950 easily. I read all the speeches of the hon. member for Vancouver-Quadra in 1949, and in doing that I certainly earned my pay. I should like to read this summary of my findings, but I have not time. Here are thirty items, ranging all the way from a Pacific pact to a complete trans-Canada highway system of several roads including lighthouses on the Queen Charlotte islands, $50 at sixty-five for everybody, agricultural floor prices, bigger travel bureau, Alaskan railway and so on. With the- pricing I have been able to give, on those items where he was specific enough to make a calculation in that one year the hon. member advocated projects which would require an extra expenditure of $800 million; and taking into account the many other things he advocated, such as the Pacific pact and a modern merchant marine, which are difficult to price exactly I would say conservatively-that is in the old sense, not the spendthrift Progressive-Conservative sense-he would have added $1,500 million to the budget of Canada that year if the government had adopted all his suggestions, not bad for one economy-minded Conservative. This list is quite open to any hon. member who would like to see it.
When I was reading through his speeches I was also looking for something else, for any suggestion of economies in other departments which might make funds available for his projects, and most important of all for any suggestions as to how taxes might be increased in order to pay for just one of these new projects. Nothing of the kind was mentioned anywhere. There was no mention at all of any other tax. On the contrary he and his party have always opposed every tax proposal brought in by the Minister of Finance. In this house there is no more devout believer than the hon. member for Vancouver-Quadra in that old Tammany hall precept I quoted earlier: never vote for a tax measure and never oppose a public expenditure. The hon. member goes a little further and suggests plenty of new expenditures.

The Address-Mr. Fulton That is not going to cut down the cost of government-that is not going to save $500 million out of the present budget.
Members of parliament can be of great help if, instead of fishing around the estimates in the House of Commons or in the public accounts committee, they would look around their own ridings. We do have these treasury board controls all through the departments looking for internal economies; but the people who can do a better job externally are the members back in their ridings and their constituents who are even better judges of where economies can be made without impairing needed service. These savings should be made where services are superfluous. Let them come here and tell the minister: "That service in my riding is no longer needed, we can do without it; these employees are no longer necessary" and they will be making a real contribution. If in that way they can effect any economy, not necessarily of half a billion dollars but of half a million dollars, half a thousand dollars, or even half a hundred dollars, the Minister of Finance will be grateful because it will lessen his burden; the government of Canada will certainly be grateful, and the people of Canada will be most grateful of all because then we members of parliament will be doing a real job in our own field in fighting inflation.


Mr. E. D. Fulton (Kamloops):: In opening
my remarks I want to associate myself briefly with those who have congratulated the mover (Mr. McMillan) and the seconder (Mr. Breton) of the address in reply to the speech from the throne. I am still close enough to the new-member stage and to my maiden speech to remember just how difficult it is; and if for no other reason I feel that I am qualified to congratulate them upon the extremely able speeches they made.
I want to deal immediately with one or two of the remarks made by the parliamentary assistant to the Minister of Finance (Mr. Sinclair) who just completed a rather odd speech. The hon. gentleman indicated that the government would be grateful if we would suggest concrete methods by which expenditures could be reduced. Unfortunately, that is not in keeping with the attitude of the government as revealed in this house last year. A simple suggestion, followed as I recall it by a motion which would have reduced an estimate for travelling expenses by only some $25,000, was immediately treated as a vote of want of confidence in the government. It was argued that we were upsetting the balance of ways and means, and that we were possibly cutting away at the most vital service of the Department of Transport-with fMr. Sinclair.]

only $25,000! We had taken the hon. member's suggestion and the suggestion of the Minister of Finance (Mr. Abbott) seriously. We made an honest effort to attempt to find some places where there might be reductions. We went so far as to make a motion, and it was treated as a motion of want of confidence in the government. This government, which is spending $2.5 billion of the people's money every year, says on the one hand that it desires suggestions for reductions, but on the other hand when we move a reduction of only $25,000 they call in all their one hundred and ninety-eight members to vote it down. That record speaks more eloquently than all the misguided eloquence of the member for Coast-Capilano (Mr. Sinclair). From it the country can see who is really making the effort to reduce expenditure.
According to his own statement the hon. member has done a great deal of work on today's speech. I am glad he has, but I regret that apparently most of it was misplaced. It must be admitted he has done a lot of work, and has brought out a lot of figures. As he was speaking, I could not help but feel that had he done as much and as diligent research into the reasons and methods of making reductions in government spending as he has into the reasons why we cannot make reductions, then it would have been of some help to the taxpayers of Canada.
I was struck by the tremendously wide powers and influence which the member attributed to the opposition. I include in the word "opposition" the members of the C.C.F. and Social Credit parties. Actually, we number approximately sixty members in the house altogether as against one hundred and ninety-eight on the government side. But what an influence we have, Mr. Speaker! According to the member for Coast-Capilano all we have to do is ask for an increase in expenditure, and it is immediately granted. According to the hon. member the opposition is entirely responsible for any increase in the amount of expenditures. We are responsible for the size of the government's budget. But when it comes to elections, Mr. Speaker, and the taking of credit for all the splendid things which the Liberal government says it has introduced such as family allowances, old age pensions and all these other things, who gets the credit? The opposition is not responsible for those, oh no, it is the Liberal government. That is the story we hear at election time.
One cannot help being struck, as I say, by the difference in the influence which the hon. member ascribes to the opposition in increasing as against decreasing expenditures. If all we have to do is to ask for an increase and it is granted-that is the impression he sought to leave-


Some hon. Members:: No, no.


Edmund Davie Fulton: -then let him give us some credit, let him give some weight to our requests when we ask for a reduction as we have, in concrete form, in the past two sessions. Let him tell his minister, and the other members of the cabinet, that when we make motions for reductions they should not be regarded as motions of want of confidence, but the minister should really look at the question on its merits. The motions we moved concerning advertising, travelling expenses and sundries is the answer to the point made by the parliamentary assistant.
After listening to the remarks of the parliamentary assistant this afternoon, Mr. Speaker, on the question of manpower I believe it is time the Prime Minister (Mr. St. Laurent) or some authority defined the status of a parliamentary assistant in this government and in this house.


Mr. Cruickshank:: The hon. member will never be one.


Edmund Davie Fulton: I would not want to be one under the present circumstances.


Mr. Abbott:: Be careful, leave the back trail open.


Edmund Davie Fulton: We used to have in this country a principle-I say "used to have" because it is certainly more honoured in the breach than in the observance today-a principle oalled cabinet solidarity. All indications are that it is completely gone now. I realize that parliamentary assistants are not, as such, members of the cabinet, but I believe it is time that their relationship with the government, and just how far they speak for the government, was defined. Just before coming to Ottawa for this session I recall reading in the Vancouver Daily Province that the member for Coast-Capilano said he supported the Legion brief entitled "Operation Preparedness". You will recall, Mr. Speaker, that that brief called for compulsory training for the reserve. The hon. member also stated, and repealed on a recent occasion, that he believed in conscription. Incidentally, he did not say here today, as I understood him, that he supported and advocated the immediate application of the Legion brief.
If in his view we should support the Legion brief, and I agree it should be applied now, I should like to ask him whether his view coincides with that of his minister, the Minister of Finance. The minister is in his seat, and I should like to ask whether he shares the view of his parliamentary assistant. These are matters of national policy. They are not matters unconnected with the various pressing affairs of the country today, but are matters of national policy. I suggest that no 80709-18
The Address-Mr. Fulton parliamentary assistant, no one associated so intimately with this government should go around the country expressing views on these matters of national policy unless those views are, in fact, the views of the government. I want to know whether the views expressed by the member for Coast-Capilano, I think it was at Powell River, are in fact the views of the Minister of Finance?


Douglas Charles Abbott: My friend has no right to cross-examine me, but I shall answer him. My parliamentary assistant is entitled to voice the views he did, and I am quite entitled to voice mine. I may or may not agree with his views as he has expressed them, but he is perfectly free to express them and always has been.


Edmund Davie Fulton: Now we have it. We thought cabinet solidarity as a principle was in danger in this country, but the Minister of Finance has just buried it.


George Alexander Cruickshank: What is your opinion?


Douglas Charles Abbott: Would my hon. friend tell me what he believes to lie the principle of cabinet solidarity?


Edmund Davie Fulton: When a member of the government speaks, he speaks for the whole government.


Douglas Charles Abbott: Is my parliamentary assistant a member of the government?


Edmund Davie Fulton: It is for that reason I have asked if we could be favoured with a definition of the status of parliamentary assistants.


Douglas Charles Abbott: I can answer that.


Edmund Davie Fulton: Just before you do, I take it that he was speaking for the government this afternoon.


Some hon. Members:: Oh, no.


Edmund Davie Fulton: He said "speaking for the Minister of Finance", and he repeated that.


Douglas Charles Abbott: The first order in council appointing-I think I am right in this- parliamentary assistants was one appointing myself as parliamentary assistant to the then minister of finance, Mr. Ilsley. I believe I can recall the wording of the order in council fairly accurately, and it was to assist the minister, both within and without the house, in such manner as the minister may deem fit, or words to that effect. I believe that is the definition of the duties of a parliamentary assistant in the order in council.


Edmund Davie Fulton: I wonder then, if the minister and his parliamentary assistant express divergent views, whether the parliamentary assistant is assisting the minister in such
266	HOUSE OF
The Address-Mr. Fulton manner as the minister may see fit? Or is the minister repudiating the statement of his assistant?


Douglas Charles Abbott: I do not have to accept or repudiate his views. If my parliamentary assistant sees fit to speak to the house on matters relating to the Department of Finance, then I would expect him to voice my views, but if he sees fit to speak on any other matter of public interest he is free to voice his own views.


Edmund Davie Fulton: As a statement of fact or policy of the present government with respect to the appointment of parliamentary assistants, I suppose we have to accept that.


George Alexander Cruickshank: Will the hon. member permit a question?


Edmund Davie Fulton: I have a number of other things to say, Mr. Speaker, and I should prefer it if I might be allowed to proceed. I should be glad to deal with questions at the end of my remarks.
I simply say that now we have that statement of policy outlining the status of parliamentary assistants, I think that we and the country should bear it carefully in mind when in future parliamentary assistants, either inside or outside of this house, purport to speak for the government, as they have in the past, and to express the views of the government.


James Sinclair: Never.


Edmund Davie Fulton: Oh yes, they have. I am not saying that this particular parliamentary assistant has done so outside, but others have made speeches outside, on agricultural matters, which the minister has had to, shall I say, correct if not repudiate.


Mr. Gardiner:: I have never corrected
reports of my assistant's speeches. I have enough trouble correcting reports of my own speeches.


Edmund Davie Fulton: This is a serious matter, Mr. Speaker, opening as it does a breach in this principle of cabinet solidarity. I know that parliamentary assistants are not paid as much as our cabinet ministers, and I do not begrudge them their salaries in so far as they do the work and get an insight into the workings of the government; but for my own part 1 believe that when they accept that appointment as parliamentary assistant they should then see to it that, on all matters of national policy and matters which are issues of the moment, they take care not to go off at a tangent from the government. If they do so, and if that practice is persisted in and enlarged, as it undoubtedly would be, it would mean the end of the principle of


cabinet solidarity. Having said that, perhaps we can leave the matter for the moment.
There is one other matter to which I wish to refer, and which arises out of the speech of the hon. member who has just concluded his remarks, before I turn to the subject I myself wish to discuss this afternoon. He referred to the statement of the hon. member for Broadview (Mr. Hees) and implied that he was careless with figures. I am informed by the hon. member for Broadview that the figures he used with respect to the strength of the British armed forces-and I point out that they were with respect to the armed forces, not just army-were given to him by the British information office in this city just shortly before he spoke.
The other matter was an attempt by the hon. member to suggest that the hon. member for Broadview had evaded the question of how the manpower for the armed forces should be raised. Once again I regret that the hon. member for Coast-Capilano (Mr. Sinclair) appears to have worked diligently but in a rather misplaced fashion; because if he had been more disposed really to study that speech in order to see if there were suggestions in it, he would have found that the hon. member for Broadview laid down a specific and clear-cut six-point program incorporating his suggestions as to how our armed forces should be raised.
This afternoon, Mr. Speaker, I want to say a word or two with respect to the program outlined so far by the government for the purpose of placing this country in a position to meet the crisis in international affairs with which we are now faced. I hope I will not be thought to be unduly critical when I say that what we have had so far are, in the main, broad generalizations-an indication of goals or objectives-but not much in the way of detail as to how we are to get them. The broad objectives are all very well and are of course an essential part of the information we must have in order to assess the merits or otherwise of the government's programs for this and succeeding years; but what I think we must concern ourselves with more than ever is the question of whether the plans are adequate even to meet the objectives which the government has laid down. In other words we must say to the government, "You have told us what you are going to do. You are going to raise so many men for national defence and spend so many billions of dollars-$5 billion in the next three years-on arming and equipping those forces. That is all very well, but now tell us how you propose to do it."
My own views with respect to the methods to be followed in the raising of our defence

forces are on the record both in and out of this house. Nothing that has occurred since has caused me in the slightest degree to modify or change those views; I still hold and advocate them as strongly as ever. But the Prime Minister (Mr. St. Laurent) has told us that the government does not propose to change its methods for the time being. While I do not in any way accept this answer as final or satisfactory, I do not propose at this moment to elaborate my own views but rather to deal with the government's program in the light of the present facts and within the limitations of the government's own policy. I believe that those facts show that the government's policy is inadequate and that its program will not work.
However, just before turning to an examination of this program, I should say that I support to the full the remarks made on Monday last by the hon. member for Nanaimo (Mr. Pearkes) to the effect that the urgency of the situation is such that the government should lose no time in putting itself in a position where other and more vigorous steps, actually in the contemplation of the Prime Minister himself, can be taken to place this country in a position of readiness. The words of the hon. member for Nanaimo were so significant and they put the whole position so clearly that I think I am justified in reading them into the record again. They are found at page 99 of Hansard of February 5 and are as follows:
It would, however, seem to me only common prudence that the government should at this time set up the machinery which may be necessary to accelerate its method of enlistment, its method of assigning the manpower of the country to the various services and to industry, agriculture, transport and all the rest of it. If these steps are left to the eleventh hour I feel that it will not be possible to take full advantage of the resources of this country, both in manpower and in materials. Therefore I feel there is no time to be lost in carrying out a review both of our assets and of our deficiencies. I feel that that review should be carried out at once so that the government will be in a position to change its present method of providing for the expansion which has been indicated, should the methods that it proposes to follow immediately fail, or should the situation deteriorate to such an extent that other methods would have to be followed. There is no time to be lost in making the preparations and in setting up the machinery so that a more vigorous system of supplying the material and the personnel for expansion can be followed, and to set up this machinery there are many requirements.
The reasons why I feel that the urgency of the situation justifies those remarks appear quite clearly from the statements of the ministers themselves. The Prime Minister (Mr. St. Laurent) and the Secretary of State for External Affairs (Mr. Pearson) have both told us that the international situation was
The Address-Mr. Fulton never more serious. Then the Minister of National Defence (Mr. Claxton) followed with an outline of what this government's program is to meet that situation. You will remember that he gave us fifteen points and in general outlined a program calling for expansion of our armed forces to 115,000 men and the expenditure of $5 billion. What this house and the country should now be told is when this program is to be completed and by what means. Is the government ready with its specific proposals now as to how the men, materials and money are to be found to fulfil that program?
Nothing said so far justifies the hope that they are ready. Personally I doubt it.
I hope the ministers are ready with their detailed proposals. I hope the estimates are ready so that as soon as this debate is over, which will probably be in a short time now, we can examine the details of how the defence department proposes to raise, equip and train the men, and how the Minister of Trade and Commerce (Mr. Howe) proposes to procure the raw materials on which so large a part of the $5 billion will be spent. Are the estimates of the defence production department ready? Is the government ready to set up that department immediately? I hope they are and I believe the people hope so too, so they will know the government is ready with action to meet this emergency and to fulfil the program which they themselves have outlined.
No one knows, Mr. Speaker, just how long we may have. We can talk about programs, but the Russians in Europe and the Chinese in Asia are calling the shots.
We may have a year or two years or three years, but we may only have as many months. What plans has the government to deal with the situation which will develop if it should turn out that we have only a month or two or three months? When he spoke on Thursday, the Minister of Trade and Commerce (Mr. Howe) certainly did not indicate that he would have any substantial part of his program in operation within six months.
I hope the Minister of Finance (Mr. Abbott) is ready with his budget and his other proposals as to how best to raise the money to make this tremendous effort. Is he ready particularly with his program and proposals as to how the present inflationary pressure is to be arrested? How does he propose to see to it that this $5 billion is pumped into our already tight-stretched economy without aggravating inflation to the extent referred to by Mr. Donald Gordon in his speech that has already been quoted in this house? This house and the country will want to know
268

The Address-Mr. Fulton what plans the minister and the government have for dealing with inflation if it should actually reach the point referred to by Mr. Gordon, when it becomes that most dreaded of all things-runaway inflation.
And incidentally, Mr. Speaker, how much further does the government feel that we have to go before that point is reached? I wonder whether the government appreciates to the full the dreadful squeeze which is being felt now by the consumers of this country-the Ordinary men and women of Canada. The people of this country are in a position where they desperately need something to be done now to help them. Prices have already gone up enormously and the trend is being aggravated by every statement that the government makes threatening further and increasing shortages of both basic materials and consumer commodities. Of course prices are bound to go up when such statements are made and so much money is pumped into the stream of competitive buying, and no steps are taken to control the pressure. This house and the country, Mr. Speaker, will want something better than the statement of the Minister of Trade and Commerce on Thursday, which when you analyse it amounted to nothing much more than a lame plea that we cannot really do anything by locking the stable door after the horse has been stolen.
And incidentally, it is very noteworthy what a different and timorous attitude the government takes this time from its attitude previously with respect to measures to control inflation. We all remember how, particularly in the post-war years, when we thought we were back again to a peacetime economy and controls were being discussed, the government used to boast about the promptitude with which it had acted in 1941 to keep costs down by its anti-inflationary program. We all remember how they used to boast-and with, I think, justifiable pride-that when the Americans came to work out a program to check inflation and rising costs there they studied carefully the Canadian machinery and adopted much of it in great detail. In other words, Canada acted first and the government boasted about it in the last war, and has always taken credit previously for its own ability -to control its own affairs with respect to rising costs in this country on that occasion. This time, however, what an unfortunate reversal of attitude! The government now says that Canada itself can do nothing to control inflation but that the whole situation here depends upon what is done south of the border, and that we must wait 
for them to do it first. This country is experiencing on every hand today the outward expression of the inward policy of do-nothing Liberalism. The Minister of Trade and Commerce confirmed this when he said on Thursday, as quoted on page 186 of Hansard:
We earnestly hope our American neighbours will succeed in attaining a reasonable measure of stability; for only if that happens can we in Canada hope to avoid serious trouble.
Mr. Speaker, this sort of attitude and this sort of policy on the part of a government which is responsible to the Canadian people is not sufficient to satisfy this house and this country, which want to know what the government proposes to do to arrest the present inflationary pressures.
What plans have the ministers and the government for dealing with this situation if we should be faced with all-out war in one, two or three months instead of years? It is the responsibility of the government to prepare for this eventuality. So far the only thing we have heard of a concrete nature is that the Minister of National Defence (Mr. Claxton) expects to be ready at the end of three years-and there are grave doubts, on the basis of past records and performance, that he-or anyone else in this government-will be ready by then. So I hope the Minister of Finance and the other departments are ready with their detailed plans, proposals and answers; because, Mr. Speaker, my firm belief is that just as soon as this debate is over parliament must get down to a thorough scrutiny of the state of this nation's preparedness and of the government's plans to prepare the nation.
In particular we will want an assurance that the goods on which it is proposed to spend this five billion dollars are or will be available within the time required. What plans has the government to gear our industrial machine to the production of those specific goods and materials? Short of this assurance and outline to this house by the responsible ministers, the proposals referred to by the Minister of National Defence on Monday must be considered as paper plans.
This is no new situation that we face. This emergency has been in the contemplation of the western democracies for three years now -and we are not ready yet. I wish I could believe that the plans and programs hinted at are more than mere words; but in the light of past performance it is difficult to believe so. Let us look at the record.
In March of 1948, to go back no further, the definite possibility of immediate war

being thrust upon us was faced. The Winnipeg Free Press reported on March 10, 1948, three years ago next month:
Washington, March 10 (BUP)-United States military authorities in Germany have given up their belief that the world is relatively safe from war for at least ten years.
Informed senate sources said Tuesday this was a gist of a report made behind closed doors Monday to the senate armed services committee. It came from James Forrestal, defence secretary.
These sources said the military authorities are not necessarily predicting war. But they feel, it was said, that recent events make it necessary to reconsider their earlier estimates. Among the military experts reportedly cited by Forrestal was Gen. Lucius Clay who as United States commander in Europe has to deal with Soviet occupation forces in Germany and Austria.
Then, Mr. Speaker, to show how serious this situation was in 1948, the report concludes with these words:
Forrestal's testimony was credited with prompting the armed services committee to call immediate hearings on the controversial universal military training bill.
We are of course entitled to assume that our government was informed of that view and of the extreme gravity of the situation at that time. At that moment our armed forces were from 35 per cent to 37 per cent below their actual authorized strength and approximately 45 per cent below even the modest ceilings then set. Yet seven days later, on March 17, 1948, the Minister of National Defence assured this house that all was well and that good progress was being made.
The government did know at that time of the seriousness of the situation because the very next day, March 18, 1948, the prime minister, the late Mr. Mackenzie King-a man not given to strong statements-apparently told the Liberal party members in caucus that "the international situation had never, even in the days of Hitler, been more critical". This was three years ago next month at a time when we had only 33,000 men in our three services. Yet today after three years and the expenditure of billions of dollars we have only 62,000. The estimate for Russia and her satellites at that time was 5,032,000 men of which 4,000,000 were Russian, estimated to be fully trained and equipped. No one knows exactly how many more the Russians have now, but everyone knows, Mr. Speaker, that the Russians have not failed to make good use of the time. And yet two and a half years after the events to which I have referred, last June when a further move in the Red campaign of aggression was made in Korea, Canada was found with no army ready to send. We had had the Atlantic pact-we had had big words-
The Address-Mr. Fulton we had spent much money on defence, but the strange and deplorable fact is that June of 1950 found us with no army ready to be sent into action in the defence of democracy. And when in September of 1950, reluctantly, the decision was taken to send some troops it was necessary to raise a special force which could not be ready as a force for a year anyway. And all three services were still far below their then authorized strength.
We are told we now have 62,000 men in the three services. It has taken us three years then to build up from 33,000 to 62,000; and now we are told that we have another three-year plan-and will then have 115,000 servicemen and 33,000 civilians, a total of 148,000 actually engaged in national defence. That, Mr. Speaker, is just one per cent of our present population: and three years to get there. And if we are still as far short then of our objective as we are now we will not have attained even that limited objective.
This house therefore will want definite answers from the Minister of National Defence (Mr. Claxton) on how he proposes to raise those numbers, and what are his plans for the possibility of hostilities in one, two or three months. Because time is short. He gave some figures which should arouse the greatest interest and concern. The increase for January in the three services was 2,500 men. That was the best month we have had and I understand that the department itself will be surprised if it is maintained, particularly when the competing claims of expanding defence industries are felt. But let us hope for even an average of 2,000 per month. Our objective calls for 53,000 further men for its; realization: that will take twenty-six and a half more months at present rates.
So we will want to know: What are the minister's plans for an emergency? And even in the absence of an emergency, how does he propose to guide the men and women of this country, particularly the skilled tradesmen of whom there are great shortages in both the services and in industry right now? How does he propose to guide them in making their choice so that the rate of increase in the services will be maintained? It is a problem for which the government has as yet suggested no solution.
There are some other matters on which the country and the house will want information with respect to the defence program. It has been stated from time to time, in answer to criticism from this side of the house as to the rate of expansion of the services, that we are doing very well and that in any event we have not got the facilities either in equipment, which includes accommodation as well as

The Address-Mr. Fulton arms, or training personnel, to handle any more than are coming in now. The question which must be asked is: Whose responsibility is that? And the answer of course is that it is the government's responsibility. Then the question is: Why have they no greater facilities? It certainly cannot be because they are satisfied they have enough men. A look at the recruiting advertisements contradicts that at once.
The answer then must be that the government just failed to make provision for these facilities. This brings to mind the known fact that last year the defence estimates presented by the minister to his colleagues were cut by some two hundred million dollars before they ever reached this house, and it is equally certain that this had a very serious effect on the program of the three services. Why then did the government mutilate its own defence program? And especially why did it do so at a time when the international situation, in its own words, was never more serious?
Why was no provision made for accommodation to handle an increasing inflow of recruits? Why is it that the special brigade could not be trained in this country because there was no accommodation available, but had to be sent to Fort Lewis-in a foreign country-for its training? The answer is not that it was in order to enable them to train in co-operation with the American forces for service in Korea, because this is not the fact. Our troops there are training by themselves. The simple fact is that with the international situation as serious as it was, this government neglected altogether to make any provision to place our training facilities and accommodation in a state of readiness to meet a situation which was developing daily. The country will want to know the reason for this, will hold the government responsible for this, and will want to have facts to assure them that the lost ground is being made up and that our resources and our ability to handle a greater intake of personnel are actually being increased to a degree commensurate with the seriousness of the emergency.
Another matter on which the country will want information, and this house should have information immediately, is just what is behind the present policy which appears to be complete Americanization of Canada's armed services. I refer not so much to the adoption of American type weapons and equipment, although even here there are grave reservations-because it is by no means a foregone conclusion that American arms are superior in every detail to British type. Indeed, in a substantial number of cases the opposite can be shown. However, from the point of view of production and
	i

availability of resources there is much to be said for the standardization of equipment, but I do wish to point out here that standardization should be a two-way and not only a one-way stream, and that in those respects where the British type equipment is superior we might standardize on those types.
But what I have in mind particularly here is the now very definitely discernible trend towards Americanizing the formations and training and conditions of service of the Canadian forces. We have an example in the use by the minister of the term the other night, "air division" instead of "group," and also the American term "combat team," which might mean almost anything, as against our much more exact term "brigade group." We now see by the press that the brigade which is to go to Europe is to serve as part of the American forces and not, as might have been expected, in accordance with tradition and geography, in company with the British forces.
There would seem to be no great reason for this trend except as part of the definite although always subterranean government policy of prying Canada loose from her traditional ties with the commonwealth and empire and tying her up ever more tightly with the United States. Let me ask the minister this: Does the government really believe that the American tradition, the American organization and the American method of training are superior in every respect to our own and the British? If they do, on what examples from history and experience do they base their conclusions? If they do not, for what reason are they Americanizing the Canadian formations?


Mr. Claxion:: There is no basis at all in fact for what the hon. member is saying.


Edmund Davie Fulton: We will have more to say about it when the estimates are being considered. At that time perhaps ithe minister can explain in more detail than he has now the trend which we see in progress.
The results of this trend toward Americanization will I believe be most disastrous to the morale and fighting efficiency of Canada's army.
I will confine my remarks to that branch of the service with which I have some acquaintance and leave the others to speak for themselves. Speaking of the army, the minister himself has said that the basis of Canada's expanded army for participation in any actual war is the reserve force. The reserve force, and indeed our whole Canadian army, is built on the regimental tradition and I am convinced it is fair to state that much of the splendid record established by

The Address-Mr. Gillis
the Canadian units and formations in two world wars has been due to the regimental spirit which has been built up.


Brooke Claxton: Hear, hear.


Edmund Davie Fulton: In this we model ourselves entirely on the British tradition.
Adoption of the American system means not only the complete re-organization of our supply, medical and other services but also the abandonment of this regimental system. The units will completely disappear, those splendid units from coast to coast of this country, the Canadian Scottish in Victoria, the Seaforth in Vancouver, the Loyal Edmonton Regiment, the Royal Winnipeg Rifles, the Queen's Own and the 48th Highlanders of Toronto, the Black Watch, the Carleton and York, the Nova Scotia Regiment and a score of others, to say nothing of the five named units of the permanent force-all with a tradition and history which are the very backbone of Canada's military tradition -will be swept into oblivion by necessity if we adopt the American method.


Brooke Claxton: Not at all.


Edmund Davie Fulton: The effect on the morale of the reserve army will be immediate and disastrous. The minister has just interjected "not at all". If we adopt the United States method our formation will be based on numbers of various regiments and you will not have named units.


Brooke Claxton: There is no such intention whatever.


Edmund Davie Fulton: I am glad to hear the minister say that. I hope he will give us some proof of it and be able to explain the trends that we see going on when we come to his estimates. I repeat that the house and the country, and particularly those officers and men who have been struggling so gallantly to keep the reserve army alive, with so little effective assistance and support from the government, will want to know the reason behind the policy of Americanization, will want to know how far it has gone and will, I believe, insist that the trend be first stopped and then reversed.


George Alexander Cruickshank: Will you answer a question now?


Edmund Davie Fulton: Yes.


George Alexander Cruickshank: Are you in favour of compulsory service in the reserve army?


Edmund Davie Fulton: I have made my views about the method-


George Alexander Cruickshank: Are you or are you not?


Edmund Davie Fulton: -of raising, training and equipping Canada's defence forces clear. They are on the record and speak for themselves.


George Alexander Cruickshank: Are you in favour of conscription now?


An hon. Member:: Are you?


George Alexander Cruickshank: I declared myself. I am.


Edmund Davie Fulton: I might point out to the hon. member that I have also declared myself, and did so before he did, and received no support from him.


George Alexander Cruickshank: Then say it now. Get your instructions in caucus.


Mr. Clarence Gillis (Cape Breton South):: Mr. Speaker, I have listened for a couple of weeks to this debate, and I hesitated about taking part in it. A lot of discussion has taken place on many matters, and it was all useful. As a rule I take the debate on the address in reply to the speech from the throne as an opportunity to air problems and grievances close to home, but at this particular time I am going to deal with what I think are the most important and serious questions confronting the parliament of Canada and the Canadian people. I am going to deal with the questions of manpower and defence, because they are so closely related.
In December of last year I was hopeful that war was a long way off and could be prevented. I pinned my hope on what had taken place at the conference of prime ministers in Great Britain. Since the end of the last war an attempt has been made by Russia largely to divide the world into two camps, communism and capitalism, and the United States foolishly fell into the trap. We all know that the bible written by Stalin is merely the bringing up to date of Leninism, and definitely tells the Russian people, and everyone within the orbit of totalitarianism today, that war between capitalism and communism is inevitable, that it has to come, that we cannot live side by side in the same worlds that either the totalitarian system must go forward and conquer the world or the world will inevitably go back to the old capitalist, imperialist regime.
That seemed to be the trend in the United Nations. The trend there was to go headlong into that kind of war. In listening to broadcasts and reading the deliberations at the prime ministers' conference, I was pleased to note that the commonwealth countries and the Scandinavian countries were getting together. I thought that they were going to be able to exert sufficient influence in the United Nations to modify United States policy and perhaps prevent for a long time-possibly for all time-a head-on clash between Russia and the United States. I was very much disappointed in what happened, and I have revised my opinion that war is a long way off. We may have a year; we may have two
272	HOUSE OF
The Address-Mr. Gillis years; we may not have a month. It depends on the timing of Uncle Joe. If he thinks the time is right he will strike, and they always do what you do not expect them to do.
I have revised my opinion as to whether war is a long way off because of the vote of the United Nations declaring China an aggressor. Last December I was very hopeful. Since the vote' was taken I am not so hopeful. It was played up in the press and over the air that a large percentage of the members of the United Nations voted to declare China an aggressor. However, if you look at the figures you will see that there were 44 in favour, seven against and nine abstentions. The seven who opposed the resolution were members of the Soviet bloc representing the governments of 300 million people, and India and Burma with more than 300 million people, a total of 600 million. To that must be added the population of communist China of more than 400 million people. Therefore the seven against the resolution represented more than a billion people. The forty-four countries that voted for the resolution-and it seemed such a huge majority-have not a billion people. Therefore when you analyse the vote of the United Nations declaring China an aggressor the population of the countries that voted against the resolution or abstained is larger than that of the forty-four countries that supported it. Do not forget that practically all of the billion people opposing the resolution are within the communist orbit or can be absorbed very easily.


Mr. Browne (St. John's West):: Does the hon. member really believe that the billion people he says were represented by the seven were in favour of what the Soviet government wanted?


Clarence Gillis: They voted against declaring China an aggressor.


William Joseph Browne: Those seven representatives are not representatives at all.


Clarence Gillis: That may be your opinion but the facts are on the record.


William Joseph Browne: Do you think they are?


Clarence Gillis: Yes, I do. They represent their governments.


William Joseph Browne: They represent their people?


Clarence Gillis: Yes, or they would not be there. That is how the vote is summed up. When you declare a country an aggressor, under the United Nations machinery you have got to do something about it. Otherwise you are just making a fool of that organization. That is what leads me to believe that we should not complacently proceed in this house or


throughout the country on the assumption that we have a year, two years or three years to prepare. I hope we have got ten years but we should take the facts as they are. As I was suggesting a moment ago, the enemies that we may have to fight are countries that do not play the game as we do. They have no ethics and no morals. There is no particular line that can be followed by the old-time generals. They hit fast; there is no declaration of war. They fight a war on the basis of winning at all costs. Manpower means nothing to them; and if war comes it will be a fast one. We do not want to go along in this house or in the country on the assumption that we have the same set-up we had in 1939-40. We have not. In 1939 we had a million people unemployed in this country from whom we could draw. We had a very small national income. We had all kinds of room for industrial expansion, and we had the manpower on which we could do a fast job; and I think we did an excellent job.
Today the situation is different. The manpower position is very tight. If you had to do a fast job today I do not know where you would get the manpower. Look at the last statistical survey on the labour force in Canada issued by the Department of Labour. You will find very few spots where you can siphon off people who may be non-essential to the economy. We have a working force of approximately five million, and they are all in industries essential if the economy is to be kept moving, or industries which would have to be converted for war purposes; and if you convert them for war purposes you are increasing your manpower problem. You may get a few from those employed in trade, such as in retail stores and that sort of thing, where some 331,000 are now employed. You may get a few from the 72,000 in finance and insurance, though they would not be very good soldiers; they are not tough enough. I am sure the Minister of Finance (Mr. Abbott) would not want to don a uniform and slug it out again. In general services across the country you have another 451,000 employees. So looking at that statistical survey we find that we have approximately 818,000 people to draw from. How many of those are fit and how many are unfit; how many would be any good for combat service and that sort of thing, I do not know, but that is about the only force in Canada on which you could draw today.
In the meantime the Minister of Trade and Commerce (Mr. Howe) plans a large industrial expansion. He has to expand steel, and I say that is a must; that has to be done. But if he is going to expand steel he will need a great many more people in the steel industry, and I do not know where he is going

The Address-Mr. Gillis
to get them except from the group I have mentioned. So there is a great difference between our manpower problem in Canada today and the problem in 1939-40; and we must start doing some serious thinking about it.
On the other hand there are some spots we may draw from, and I have a few suggestions to make. First I would refer to the Canadian Legion's preparedness program. I must say I think it was badly timed. That program of compulsory training in the reserve forces could not be implemented in this country for some considerable time because we do not have the facilities for training soldiers. Take a look at your reserve army set-up from Vancouver clean down to Cape Breton, and what do you see? You do not have to leave Ottawa. The barracks in this city leave much to be desired; that is about as kind as I can be. The facilities are terrible. So I think we will have to undertake a vast building program to provide barracks for reserve army training in this country, because I believe the reserve army must be the base of our army for the future. That is where the training will have to take place. I quite agree with the program of the Legion, except that I believe it was badly timed and could not be put into operation for some considerable time.
Then there is the type of training the reserve army is getting. Most of it belongs to the Boer war. They get a little bit of foot drill in the evenings. In many sections of the country you call a parade for two hours in the evening, and you will have perhaps six officers and four men turn up. Well, four men do not want to be shouted at by six officers, and the officers are in the position that they just have not the facilities; and no one is pushing the thing very hard. I believe someone will have to take a look at the whole reserve army set-up and see that it is provided with facilities so that a proper type of training may be carried on. Even the types of weapons used in the last war are obsolete today. If the reserve army is to be properly trained it should have up-to-date weapons and be taught how to use them, together with all the modern techniques. I believe training for two weeks in the summer is too short. The first week you are in camp you are busy getting the tents up and getting settled, so nothing is done. It takes three days of the second week to tear the tents down again, so they figure why bother with the remaining three days, and go have a beer. As a result not much training is done. I believe that training should be extended to at least a month.
Then I do not believe industry in this country, or even the civil service, gave proper
co-operation in permitting men to go to camp. For example, I know one industry that has a contract with its employees. If you are off a certain number of days in a month or a year you may be declared an habitual absentee and are liable to lose your employment. Men actually have lost their employment for this reason. I know some boys who went to camp last year for eight days. When they came back they were given slips notifying them that they had violated their contract and were considered habitual absentees. There is no incentive in that kind of treatment for a young fellow to take training. Worse than that, this industry pays a bonus at the end of the year. I know some young fellows who went as instructors and spent thirty days in camp. When they came back they were notified that they were absentees, so they lost 50 per cent of their yearly bonus. Someone in the government will have to check on employers of that kind. That is quite a large organization, too. I do not want to name it. That sort of thing must be corrected, however, because I believe the reserve army has to be built up as the base of our army for the future.
Then I do not want to see manpower made available in the ways I think are developing. For example, on Saturday I noticed in the press that 3,500 employees of General Motors at Oshawa had been laid off. If that kind of economic conscription is going to take place for military purposes, I think it is bad and should be clarified. No one can tell me that a shortage of materials developed so quickly that it necessitated laying off that number of men in that short time. I hope it is not a matter now of just rooting them out of what you may term non-essential industries in order to pressure them into the service. That is the worst kind of conscription, and I think the government should say this is not government policy and they are not in favour of it.
Another thing I did not like was the cutback in housing; and I see the Minister of Resources and Development (Mr. Winters) is in his seat. I think that cut-back was one of the worst things that could have happened. We are going to need more and more housing. If anything serious develops which necessitates Canada making an all-out effort we are going to have to augment our manpower supply through immigration, both for military and industrial purposes, because with the manpower situation today I do not see how we can expand our economy very much and have any left to go into the services. So we may need wholesale immigration and we may need it fast. I think the cabinet did the minister a disservice wher^ they ordered him

The Address-Mr. Gillis to cut housing in this country, because I know he would not do it himself. I believe that program should have been stepped up in order to prepare for what may be an eventuality.
In my opinion this is not a situation that is going to be cleared up by tomorrow. It is a situation that is going to keep the Canadian people, and the people of this continent, on their toes for the rest of our lifetime. While we are not a military nation we have to face up to the threat from the people outside. If we let our bars down and show any signs of weakness, these people will take advantage [DOT]of it. Our only chance to keep peace in the world for any length of time is to show the other fellow we are ready to fight if he wants to fight. We are not looking for a fight, but it is being forced on us whether we like it or not. I should like the Minister of Resources and Development (Mr. Winters) to take another look at the housing problem and see whether the government will permit him to go ahead with a better housing program than he had before. I am sure that if he is short of lumber the member for Kootenay West (Mr. Herridge) and several others can tell him where to get plenty of lumber. British Columbia is full of it.
There is another way in which we could perhaps augment our labour force. There are hundreds of men in this country on pensions who are still productive, but the means test in the old age pension and war veterans allowance prevents them from taking employment. I believe the abolition of that means test in the war veterans allowance and old age pension would return to service many men who are still capable of doing some work. If the average boy drawing war veterans allowance takes a job and earns over a small amount, then his allowance is cut off. He has to go through all the red tape in order to have it restored. Most of them will just sit there. There are hundreds of men in this category who could be used, not in the heavy industries, but for replacing men who are doing light work who are capable of doing other types of work that are more essential.
For the benefit of the Minister of National Defence (Mr. Claxton) I might say that there are hundreds of able-bodied men doing clerical work in the defence department who could be replaced by women. I believe the minister should take a look at that. The Minister of Finance (Mr. Abbott) enters this picture, too. Women are not going to go into industry unless there is some tax incentive given to them. If the average woman goes out and earns a few hundred dollars, her husband is declared a single man for tax purposes and ha^ to pay at that rate. I


believe that in order to augment our labour force the women should be utilized, and some compensation should be given to them if they do go to work. I believe it is necessary for everyone to get in and pitch.
On the point mentioned by the member for Kamloops (Mr. Fulton), the standardization of arms, I think our men in Korea are in a spot. The United States has established and is maintaining the supply lines to Korea. If something happens to a Canadian mortar and a part is needed, they have to send to Canada for it. There is nothing in Korea. While depots have been established by the United States, our fellows cannot use American ammunition because they have different types of weapons. It is an awkward position. I do not need to tell the Minister of Finance how awkward that is. He recalls how, during the first war, we had to wait until some poor Tommy was killed in order to get his rifle because that big long pole which we had, the Ross rifle, was no good. Until we were furnished with English arms we just gathered up English equipment, and I believe that is pretty much the situation in Korea.
In my opinion the standardization of arms program should be speeded up. With all due respect for the opinions expressed by the member for Kamloops, I do not believe it is possible for us to stick to British type weapons today. The British have already agreed upon standardization with the United States. These forces are no longer the forces of any particular nation. They are the United Nations' forces. We are all in one pool. The United States has the machinery for production. They can turn it out faster than anyone else. We are all fighting together anyway, and it is just as well to have one type of equipment throughout. I believe standardization should have taken place a long time ago.
I should like to say one word on this matter of civil defence. I am not going to enlarge upon it at all because another member of this group is going to do so. Civil defence in Canada is in a pretty bad way. I believe that it is in better shape in Nova Scotia than it is in the rest of Canada. We have a very good fire marshal in the provincial government who has been working on this problem for the past two years. I believe we have pretty complete standardization of equipment in that province today, and that has to happen straight across the country. The thought I should like to leave with the minister responsible for that particular arm of defence is that, as soon as possible, civil defence should be divorced from military control. It should be organized on a local level. Villages and towns could co-ordinate in areas where they can work together. It should not be

centralized in Ottawa, and it should not be under the military arm at all. There should be a department of civil defence. During the last war in Britain it was handled almost exclusively, and very effectively, by the local authorities in the towns and villages. I believe that is the way it should be done here.
Since the Minister of Trade and Commerce (Mr. Howe) is in his seat and has announced plans for expanding the steel industry, I should like to direct a remark to him. When I came to this house I was rather surprised that there was a shortage of steel. From discussions in this house I was under the impression right along, of course, that there was a shortage, but I read a statement made by the head of one of the large corporations in December. It was made to a yacht club, and was to the effect that there was no shortage of steel in this country. He said they could not market all the steel they were producing. It might not be a bad idea to get together with that fellow. He may be hoarding steel somewhere. If there is to be an expansion of the steel industry, as I have suggested many times in this house, the logical place for that expansion is at Sydney, Nova Scotia. There is iron ore and a supply of men at that point. You have all the facilities, coal and everything bundled together. It is a good spot for expansion. I believe the company has some plans for it, but it might not do any harm to prod them a bit.


Clarence Decatur Howe: I was doing that this afternoon.


Clarence Gillis: I hope the plate mill down there has not been forgotten. The shipbuilding industry will be reopening and that mill could be used. It should be done as soon as possible.
Mr. Speaker, I should like to conclude by saying that I associate myself with the remarks made by the member for Saint John-Albert (Mr. Riley) a few days ago. He made an excellent speech for the maritime provinces, and pleaded for the decentralization of industry as well as a greater recognition of the economy of those maritime provinces. I do not want to repeat anything he said, and because he said it so well I am not going to say anything about it this afternoon.


Mr. J. L. Gibson (Comox-Alberni):: Mr. Speaker, first of all I should like to join with those who have taken part in congratulating the mover (Mr. McMillan) and seconder (Mr. Breton) on the excellent speeches which they made. I believe they should be congratulated on another score, for having won their by-elections. Since I came here in 1945 the history of the Liberal party in by-elections has been very bad. I
The Address-Mr. Gibson believe they must have been good men to win by the majority that they did.
I have been rather surprised that there has not been more support for this excellent brief prepared by the Canadian Legion, "Operation Preparedness". It seems to me that their suggestion that we have a national registration now is one that should be given careful consideration by the government. I realize that there are many problems and difficulties which would arise with regard to superimposing a national registration on a census, but it does not seem to me that those problems should be insuperable. It seems to me that we could use the same organization that we set up for the census in order to take this national registration. I am sure the government is giving consideration at the present time to this national registration and I sincerely trust that they will try to avoid the mistakes that were undoubtedly made the last time we had one, which was in 1941. I would presume that the government this time would be prepared to tie in our national registration with rationing.
Then there is another suggestion that also might be considered by the government, namely that it might be a wise thing if they were to consider having a fingerprint put on these national registration cards this time. We are in an entirely different type of warfare this time, and we do not want any phony registration cards running around. I would think that fingerprinting might be of great use in case there were any sabotage in the future. Certainly there are some people in this country who will object strenuously to that procedure, but my own experience has been that anyone who is an honest citizen has no hesitation about having himself positively identified under any circumstances.
The second request of the Canadian Legion is for modernization of defence resources and defence production. I believe that this brief was drawn up some time ago and that at that time there was probably some validity for the Canadian Legion's request. But after having listened to the Minister of National Defence (Mr. Claxton) and the Minister of Trade and Commerce (Mr. Howe), having seen the figures they have given us-80,000 contracts have been let for defence supplies and materials-and having had the ministers tell us what their program is to be, 1 believe that the Canadian Legion and all members of the House of Commons will be reasonably well satisfied that our government is proceeding vigorously with this particular phase of our preparedness.
276	HOUSE OF
The Address-Mr. Gibson I now come to the third request, and many speakers have already given their views on it. I am quite sure that the Minister of National Defence is not particularly happy with the results he has obtained so far in response to his request that people should join the reserve forces. The problem is this: What is he to do about it and what assistance can we, as members of the House of Commons, be in helping the government to obtain reasonable enlistments in the reserve forces? The Canadian Legion suggests that we should have compulsory service. I realize that there are great problems in putting into effect any program for compulsory service. Immediately one brings in compulsion, one has to think about means of enforcing that policy. There is also the consideration that in large cities we have facilities such as those mentioned by the hon. member for Cape Breton South (Mr. Gillis); we have armouries and the necessary facilities there. In the small communities, of course, we cannot have those.
I should like to see the government make some move to give the Canadian people an appreciation of the fact that we intend to try to do something about the education of our people in some form of national defence.
I do not think it particularly necessary that men should go out, put up a machine gun and take it down and have ack-ack battery practice. That in itself is only one phase of our national defence. It would seem to me that in any reserve force services we could well allow first-aid instruction, fire drill instruction, decontamination instruction-and there are many other things of that kind that would serve just as well-to give our young men in this country some useful knowledge in case they are called upon to use it.
I want to congratulate warmly the hon. member for Quebec South (Mr. Power) on what I thought was a particularly constructive speech. Whenever I hear the hon. member speak, the thought crosses my mind that he too seldom gives us the benefit of his great experience and the true wisdom that he has always displayed in this House of Commons. It seems to me that his suggestion that Canada might make her maximum contribution by concentrating more on air power than on other phases of our national defence is one that should be given great consideration by the government. From the statement made by the Minister of National Defence I can see that that is to be done.
There is another phase of national defence in which Canadians have shown particular ability, namely in our navy. I think that the contribution made by our navy in the escort service during the last war is one that contributed greatly to the allied victory.
I am sure that next time, with Russia having [Mr. Gibson.)

concentrated a great deal on submarines, Canada's defence effort could be well served if we had a competent navy such as we had in the last struggle.
I am glad to note that we had from the Minister of Labour (Mr. Gregg) the announcement that he was setting up a national advisory council on manpower. Knowing the minister as I do, I am quite convinced that he has no particular intention of using this body as a place to which to pass hot potatoes or anything of that kind but that he really thinks that something worth while can be done by it. The great task of this council, of course, is to try to see just how we can divert our manpower into phases that will produce greater productivity in Canada. I think the suggestion made by the hon. member for Lambton West (Mr. Murphy) was worth while. He suggested that possibly we could approach our labour leaders in Canada and suggest to them that they might be willing to increase the work week in this country of men working forty hours a week and that they might be willing, as part of their contribution to Canadian defence, to allow their men to work forty-four hours a week. The resulting increase in productivity would be valuable to the nation. I am also sure that the extra take-home pay these men would have would help in solving many of their financial'problems.
I think that the suggestion made by the hon. member for Hamilton West (Mrs. Fairclough), coupled today with that of the hon. member for Cape Breton South, was a good one, namely that we should allow increased income for our pensioners and for those who are drawing war veterans' allowance. If we also allowed them to contribute to our production in Canada I think they would make a worth-while contribution because there are many skills available to us in that segment of our Canadian citizenship.
We have another source of manpower which I know the government is counting on, namely the 150,000 immigrants whom the Minister of Citizenship and Immigration (Mr. Harris) has said he hoped to get into Canada this year. I sincerely trust that conditions develop which make it possible for those people to come here. After we get to that point, where do we look for the other manpower that is going to be necessary to take care of the increase we need in our production? I was going to suggest to the minister that he might consider our gold-mining industry. It has been suggested that we need gold in this country like we need a third leg in a pair of pants, and I am somewhat inclined to believe that is possibly true. We have 23,000 skilled men working

The Address-Mr. Gibson
in the industry coupled with, I should say, another 50,000 men who are probably providing them with goods and services, together with all the materials that go into the production of gold. I am quite sure that our communist friends must get quite a chuckle out of it when we have our minister of defence production get up here and tell us that he is short of critical minerals and then tell us that our greatest mining labour force in Canada is digging out gold that we take over to the border, for which we take a few American pieces of paper, and which they take and put back down in the ground in Kentucky. I am quite sure that nobody, other than on economic grounds, could suggest that that procedure even made any sense at all. It certainly does not make any contribution in Canada.


Mr. Murray (Cariboo):: What would you use in place of it?


John Lambert Gibson: I am sure that Mr. Hitler fought quite a substantial war without having any at all. I am not sure that our Russian friends are taking any of their manpower and putting them into the production of gold, because I have never heard of Russia's gold production. We see very little of it in this country. They seem to be doing very well without it. After all, if the gold is in the mines we know it is there, and I would be quite prepared, if the gold was blocked out in the ore bodies, to support the Minister of Finance (Mr. Abbott) if he decided to issue a certain amount of currency against the gold in the ground. It might as well be in the ground in Canada as in a cave in Kentucky.
I realize that some of our gold-mining friends in these communities which are dependent upon gold production will feel that is a very harsh suggestion to make. I am very sympathetic toward the gold mining industry. It is the one industry that has not increased the selling price of its production. Everything else has doubled and trebled in value. I would suggest that under normal circumstances we should probably revalue the price of gold and put it up to $50 an ounce. It seems to me that that amount would be much more in keeping with its true value than what it is worth at its present price, namely, $36.50 an ounce. Such a course however would be too inflationary at this time.
I was disappointed to read in the speech from the throne that the government intends to extend assistance to the gold-mining industry. I see the Minister of Mines and Technical Surveys (Mr. Prudham) in his seat. He looks a little unhappy about the suggestion of mine. I certainly hate to hand a lemon like that to a young man who has just gone into the
cabinet and is trying very hard to do a first-class job, and which I am sure he will do. However, there is one thing I would say. I am sure he would make a greater contribution to Canada's war effort if he took the manpower now engaged in gold mining and put it into the mining of strategic minerals, because I am sure there are all kinds of them in Canada that could be got out and used for national defence purposes.
There is another suggestion I should like to make but I hardly think that the government will adopt it. Any time we ever talk about anything which affects the press the government usually heads for a foxhole. The same thing is true of the opposition. It is very unpopular to do anything in this country that our friends from the newspapers do not like. I have said before that we lose millions of dollars in the Post Office Department by carrying newspapers containing the exploits of little Orphan Annie back and forth across this country at the taxpayers' expense. I do not think that it makes much of a contribution to our national welfare; but at any time that particular saving is brought up in this house everybody ducks for cover. Therefore, when I suggest that probably we are producing a little too much newsprint in Canada I wonder whether the government will go along with that suggestion either. It would seem to me that a great many of the logs that are being chewed up for newsprint could very well be turned to the production of lumber. I think probably we could get along with about half the production of newsprint in Canada that we have at the present time. Where are we sending it all? Ninety per cent of it goes down to the United States which is used of course to advertise and create a great demand for consumer goods which the United States government is trying to control. That is government policy down there. Another thing, they use it of course to produce funny papers or to glorify the Kentucky colonel, Colonel McCormick. I do not believe any of these things are essential to the prosecution of a war effort in any democratic country. If it did not mean such a tremendous waste of our great national resources and of manpower one would not object to it so much. Then there is the fact that Europe is desperately short of newsprint.
We have a story to tell in Europe. I am not too sure that some of the members of the Atlantic pact are so much sold on democracy as we should like to believe. When you come to Europe and to Great Britain you find that they have little two, three or four-page newspapers. They need more Canadian newsprint to tell a story. I do not think it is fair. I would think that

The Address-Mr. Gibson the minister of defence production or this government could enter into some kind of arrangement with the United States to cut down our shipment of newsprint to that country. Just recently I noticed an editorial in the Ottawa Journal in which it was said that one copy of a paper down in the United States had three and a quarter pounds of newsprint in it. Some of the papers in that country have a circulation of half a million. It just occurred to me that half a million of these newspapers, each weighing three and a quarter pounds, represent a million feet of timber, enough timber to build a hundred houses.
I realize that the United States must have newsprint, but at the same time it seems to me they could use it in moderation. Our government should do something about bringing it to their attention, and not let them be as wasteful as they would sometimes like to be.
There is another thing that I should like to call to the attention of the Minister of Trade and Commerce (Mr. Howe). I personally was disappointed, and it was a disappointment to many people in British Columbia, when the Alberta natural resources conservation board refused a permit for the piping of gas to British Columbia. It seems to me that this is one time when selfish provincial interests should not be allowed to stand in the way of our greater national interest. I would like to feel that my good friend, the hon. member for Peace River (Mr. Low), would discuss the matter with some of his colleagues in Alberta. After all, we might point out to them that British Columbia and Ontario also have certain natural resources. Ontario happens to have all the nickel. Ontario, therefore, might easily say, we do not want any nickel to go to Alberta. They do not need it there; we need it all here in Ontario. British Columbia has a lot of fir timber. Maybe we have not enough to spare any to Alberta. If we are to go ahead with the policy of Balkanizing Canada it will lead to disastrous results. I would certainly hope that the Alberta government-half the province out there will burn anyway in one form or another, oil, coal and gas-would show some evidence of real statesmanship, some evidence of their real concern for the welfare of Canada and try to get that gas piped out to the Pacific coast. The hon. member for Fraser Valley (Mr. Cruickshank) of course is very insistent that it go through a certain pass, and I still hope that it will go that way. But before we get into any trouble I would like to have that Alberta gas in Vancouver and in the Pacific northwest.


I am glad that the Minister of Trade and Commerce is now taking on added duties. He is going to be minister of defence production, along with his other jobs. It certainly seems to me that the old adage works in the House of Commons the way it works elsewhere. You always pile a little more on the willing horse. I am certainly glad to give a man of his training and capacity the opportunity to take care of that job for us. I hope that the Prime Minister (Mr. St. Laurent) will look around that galaxy of talent that he has-all these young fellows and the older men who are willing to do so much more than they are allowed to do today. If they were to create another minister or two over there I do not think that even our financial critics would object too much to it. I hope that we do not work the senior men of the cabinet too hard; because if we should get into trouble we want their experience and advice.
The Minister of Trade and Commerce has probably heard something about the steel industry we have been trying to promote in British Columbia for a long time. I trust that he will give the matter his usual careful attention. I hope the time will come when we shall have a steel industry there. The hon. member for Cape Breton South (Mr. Gillis) suggested that we could increase steel production in Cape Breton South. Probably we can increase our steel production in British Columbia also.
I would point out that in Comox-Alberni we have substantial deposits of high-grade magnetite ore.


James Sinclair: No gold?


John Lambert Gibson: We have a little gold out there. We will leave that in the ground for a while. We have great deposits of magnetite iron ore on Vancouver island close to tidewater. The minister does not need much coaching from me-he does very well without that-but I would certainly hope that he will see if we can get some of it into production. I do not think he will have to contribute any of Canada's money to it either, because I believe private enterprise will do it. I should like to see him facilitate in every way the use of the iron ore on the Pacific coast. I have an idea we may get some of that steel back into Canada and thus assist in relieving some of the shortages which are bound to develop.
This was not a bad speech from the throne, despite the fact that some people have said there was nothing in it. I was gratified to see that the government had come to realize the plight of pensioners in Canada. I was

The Address-Mr. Gibson
quite sure that, once the government had recognized the justice of the demand made by civil servants for increased wages to take care of the increased cost of living, it would do something for the pensioners. It must be a source of great satisfaction to those pensioners, as well as to all members in the house, that this move is foreshadowed in the speech from the throne.
The government must never forget one thing, namely the great difficulty faced by people on fixed incomes. It is good to see that those people are recognized in His Excellency's speech.
The Minister of Resources and Development (Mr. Winters) is not in the house at the moment. From various quarters of the house I have heard him criticized for having made announcements that building loans under the National Housing Act are to be cut. I do not know what measure of justification there was for his announcement, nor do I know how wise it was from a psychological standpoint. However, if one may judge from the figures placed on Hansard the other day by the Minister of Trade and Commerce (Mr. Howe), in view of the situation with respect to bathroom fixtures and soil pipe, and builder's hardware, it does not appear necessary to discourage the starting of more housing units.
However, I do not go along with what was said by the hon. and gracious member for Hamilton West (Mrs. Fairclough). She seemed to feel that because the city of Hamilton was short of houses, and because its population had increased from 150,000 to 200,000, the federal government should be primarily concerned. I think sometimes the people of Canada are inclined to believe that the government's excursion into the mortgage and building field has been such that we are now required to use reasonable prudence and businesslike judgment in how we handle matters connected with housing.
I have an idea that lending values in Canada have gone up to a pretty high point. It was made comparatively easy in this country to become a home owner. Only a small down payment was required, with the result that many people assumed mortgages far beyond* their means.
I would suggest to the hon. member for Hamilton West that at least a minor part of the housing problem could be met by the Steel Company of Canada, or the Studebaker Corporation or the International Harvester Company, or any other large company in that city. After all, if any one of them brings in a hundred new trucks as part of its operating equipment, it would have to build garages so as to keep them out of the snow. But if they bring in 20,000 extra employees, they
immediately turn to the Minister of Resources and Development and ask for houses. It seems to me that we have reached the time in this country when employers might take a little more interest in their employees' houses, and give them some assistance in that respect. I believe those companies could probably bring about some savings which private enterprise can effect much better than any form of government bureaucracy I have ever seen, or anyone else.
A number of industrial units in the logging business in my constituency have looked over the National Housing Act. They have been offered money under its provisions; but they have said, "Nothing doing. We cannot afford such a luxury, with all that red tape and regulations." I know of one outfit in my own riding that has built two hundred houses for its employees in the last four years. It was offered a government loan to the extent of $175,000 for the first one hundred units, but after looking over that offer the company decided there was too much red tape. They said that if they built the houses according to government specifications they would have to rent them for $40 a month, and that they did not believe their employees wanted to pay that much.
Instead of accepting the government money they went ahead and built their own houses. They have about two hundred of them at the present time which rent for $21 a month. The employees of that concern are ahead of the game to the extent of $19 or $20 a month. The houses are just as good as would have been built under the National Housing Act.


Gordon Graydon: Not all people work for big companies.


John Lambert Gibson: The small company could build three or four houses. However, I accept the hon. member's point. On the other hand most men work for some company, or work for themselves. I am not asking that the National Housing Act be discontinued, but I still think it would be an excellent idea, if, instead of shifting the problem to the municipal, provincial and federal authorities, some of the employers in the country got up and scratched for themselves, and did something for themselves once in a while, without coming here all the time asking for help.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.
John Lambert Gibson: When the house rose at six o'clock I had almost finished my remarks, but there has been so much discussion about

The Address-Mr. Gibson inflation that I think I should take a crack at that subject also. I believe anybody who really knows the situation must recognize of course that the present level of inflation in Canada and the present purchasing value of our dollar merely reflect the amount of water that the government saw fit to pump into our currency in order to win the last war. I do not think anyone in the house would blame them for the action they took at that time. After all, it was a universal method that was adopted to try to finance that great struggle.


James MacKerras Macdonnell: And nothing since then.


John Lambert Gibson: Of course it is always fashionable to look for a goat at a time like this, but I think we all must recognize what the government has done. Possibly I have been giving them a little too much praise. Once in a while they may need a little dusting-down. On the other hand, in order to be fair I think we have to recognize the fact that they have done a pretty good job since 1946 in producing balanced budgets, and indeed budgets that had substantial surpluses. Every time that those surpluses were announced there was a great deal of criticism in the house and throughout the country that the government was taking money unduly and robbing the taxpayers. I believe the very fact they did that has kept our price level within the reasonable bounds we have now.
Unfortunately our great and good neighbour to the south of us did not see fit to operate under the same kind of budgets and the effect of the good work done by the Minister of Finance (Mr. Abbott) and the government has been nullified almost completely by the action of the United States government in running into huge deficits at the same time. Unfortunately we in Canada cannot have a price level different from that prevailing in the United States, certainly not one which is substantially different.
It is very important that the government should address itself with real vigour and imagination to the very real problem faced by pensioners and others on low fixed incomes. I sincerely hope they will bend every effort in that direction. In due course when the Minister of Finance brings in the budget I expect that he will introduce substantial taxes on luxury goods. I think that is one way he should raise money. It is one way by which to try to discourage expenditures on non-essential items by the Canadian people. Despite the inflation everybody is talking and roaring about, I think no member of the house can stand up and say that the people of his riding are not better housed, fed and clothed, and have more economic security today than at any other time in the history of Canada.

I believe that if war is thrust upon us it will be necessary for the government to institute very definite controls in every sphere of our economic activity. When I say that I mean wage controls, rationing and the whole line-up of controls that we had in the last war. I hope the plans of the government are prepared so that they can be put into effect very rapidly if necessary. I do not want to see Canada with a menagerie of controls such as they had in the United States, rolling back prices and then rolling them up again, putting controls on and taking them off. When the government starts in to do a job of that kind I sincerely hope that they will have made up their minds and will be prepared to go ahead and make a real job of it. Until the situation develops further, I am certainly glad that we have a Prime Minister (Mr. St. Laurent) and men in his cabinet of the calibre referred to by our old friend, the great Kipling, when he says to the youth whom he is supposed to be addressing in the poem:
If you can keep your head when all about you
Are losing theirs and blaming it on you . . .


A. Earl Catherwood: Mr. Speaker, it is a very great privilege for us ordinary members of the house to have the opportunity of speaking in our free parliament and expressing ourselves on problems that we feel are closely associated with our particular ridings and with the country in general. I am very glad the hon. member for Welland (Mr. McMillan) is in the house. His riding adjoins mine, and I should like to commend him highly, together with the hon. member for Joliette-L'Assomption-Montcalm (Mr. Breton) for the excellent job they did in moving and seconding the address in reply to the speech from the throne. While they were very optimistic concerning what the throne speech contained, perhaps a little more so than those of us on this side of the house, I commend them on their initial efforts.
I should like to say a word about my predecessor in office, Mr. Mark Senn, who represented the riding of Haldimand, as you know, for some twenty-eight years. I was most pleased that the hon. member for Danforth (Mr. Harris) paid tribute to him. It was naturally not my privilege to have served in the House of Commons with Mr. Senn but it was my privilege to have lived in the riding which he represented so ably and well for a period of twenty-eight years. I can perhaps best describe the feelings of the people of the riding by telling you what a very fine old lady said when she heard Mr. Senn was going to retire from public life. She said, "Well, I guess I can go back to the party I was associated with some twenty-eight years ago."
His funeral service was attended by thousands of people from every walk of life rich

The Address-Mr. Catherwood
and poor, young and old, people who had come from far and near. One could not help but feel that we were writing the closing chapter in a book of a life of service to this country. Canada has lost a great citizen and we in Haldimand county have lost a true friend.
As I mentioned at the outset, in this debate we have the opportunity of speaking on a number of topics, and I should first of all like to say a word or two about defence. I do not expect to occupy more than twenty minutes of the time of the house this evening. According to the Minister of National Defence (Mr. Claxton), Canada has offered to increase her air training plan for Atlantic pact allies and has invited them to train in this country. The minister has never been specific about the type of training to be provided. He has never been very specific about many other matters pertaining to national defence concerning which we would like to have information. However, he took the house into his confidence the other evening up to a certain point when he told us we were going to train 3,000 airmen in this country per year instead of the original 1,000 concerning which we previously had information. If this is to be Canada's offer, I still feel it cannot be regarded as particularly impressive. In the war of 1939 to 1945 under the commonwealth air training plan Canada trained 132,000 air crew. Among those, of course, were several thousand of our own Canadian boys. This was a remarkable achievement, and was perhaps a greater contribution to the common victory in that war than any other factor. President Roosevelt, whom we all know and recognize to have been an outstanding statesman, referred to Canada as the airdrome of democracy. Looking at our defence effort and the contributions we can make to it, it seems to me there could be no greater contribution to the cause of freedom than for Canada to offer to train air crew by the thousands, as we did in 1940-45, for the free nations joined together not only in the Atlantic pact but in the United Nations as well. The experience and knowledge gained in the commonwealth air training plan, together with the fact that many of the 154 air and ground schools are more or less intact and could be converted for training purposes, would enable Canada again to be properly called the airdrome of democracy, and to become a bulwark for the protection of free peoples against possible Soviet aggression.
Those of us who availed ourselves of the privilege of visiting the Canadair plant at Cartierville, Quebec, last week witnessed an amazing exhibition by jet fighter aircraft. We saw the F-86 Sabre travel faster than the speed of sound, between 600 and 700
miles an hour, and give a demonstration of manoeuvrability beyond what we had thought possible. If there is another opportunity I strongly recommend that hon. members visit this plant and see what this marvellous plane can do.
1 believe it is the opinion of most hon. members of this house that if a shooting war does develop air power will play a leading part, and I am entirely in accord with the view of the hon. member for Quebec South (Mr. Power) and others who have given support to the need for greatly expanded air power.
It is very necessary, also, to inform our people of the great dangers with which they are faced. In a statement made some two years ago the Prime Minister (Mr. St. Laurent) said:
Recent events have brought home to us all the increasing threat to our democratic national existence of the rising tide of totalitarian communism. We know that Canada's boundaries against such a threat extend far beyond her physical frontiers. We know there can be no neutrality in this conflict.
But only last August the Secretary of State for External Affairs (Mr. Pearson) made this statement:
The furnishing to the United Nations on short notice of expeditionary forces capable of quick deployment in distant areas wherever acts of aggression might take place had not, I admit, entered into our planning.
There is a real danger, I think, in making serious estimates of the menace of aggression and then not implementing corresponding and commensurate measures of defence. If this practice continues the conviction will gradually form in Canada that our defences, meagre though they may be, nevertheless will be sufficient to protect us and our way of life. In April 1948 the Prime Minister, speaking on foreign affairs to a Senate committee, said we were not doing enough to inform the Canadian people of what is going on. Let us implement this statement; let us frankly and truly inform the people of Canada not only of the gravity of the situation, but let it be known in plain terms what the consequences could be. That is what they want to know.
It is most encouraging to note in the speech from the throne the announcement that a department of defence production will be established to act as a procurement agency for the armed forces of our allies and ourselves. This is a department of government that I think is very necessary, and I am very glad to see it being set up. It will be openly welcomed by business generally throughout Canada. Most large industrial firms which have been working on civilian orders are ready to co-operate in industrial mobilization,
282	HOUSE OF
The Address-Mr. Catherwood and can be depended upon to utilize their immense resources to this end when needed. Many small firms throughout the country are finding their business practically coming to an end, owing to the shortage of steel; and I believe that if the Minister of Trade and Commerce (Mr. Howe) would clarify the steel situation these smaller firms might be able to stay in business.
The speech from the throne also stated we would be asked to consider measures respecting federal grants in lieu of taxation on crown properties. I am very glad the Minister of Finance (Mr. Abbott) has recognized the need for legislation of this kind and plans to bring in a measure dealing with this specific matter. I do hope serious consideration will be given the possibility of giving the municipalities power to assess all government properties within their boundaries on the same basis as other properties. I believe government property, regardless of where situated, from the largest and most extensive buildings to the very smallest, should be the responsibility of the owners, the Dominion of Canada. As the British North America Act now stands it is not possible to tax property owned by the crown.
I believe this act should be revised to make this possible. However, if the government cannot see their way clear to do so, I suggest that they consider legislation under which federal grants may be paid in lieu of taxes on all crown property. The announcement made by the Minister of Finance on November 14, 1949, in which he gave a detailed explanation of the proposed method for making grants to municipalities, was most welcome, but I think most hon. members were greatly disappointed when they learned the final details. However, now that this plan has been in operation for fourteen months I am sure the minister has learned a great deal about it, and I hope the government is now prepared to recognize the need for legislation such as I have suggested.
The speech from the throne also states that we are resolved to aid in constructive endeavours to improve the standards of human welfare in underprivileged countries. This, I believe, presents an opportunity for Canada to demonstrate to the Asiatic countries not under the Soviet heel the sincerity of our desire to aid them, by providing quantities of food and other materials. If we could see our way clear to send shipments of wheat and flour to India, Burma and other countries which would alleviate to even a small degree the hunger that prevails in those lands, I am sure we would be well repaid in the good will that would be established. I also believe that if we in the western world had recognized [Mr. Catherwood.)	i

the famine conditions which have existed in China during the past four or five years and had sent some of our surplus supplies to that country, communism would not have been the force there it is today. We cannot ignore the fact, which has been brought home to us so forcibly, that the most fertile ground for communism is in the hearts of starved and hungry peoples.
Let us hope also that at this session the Minister of National Health and Welfare (Mr. Martin) will bring in legislation which will carry a ray of sunshine to our crippled and disabled citizens who, because of their afflictions, are unable to provide for themselves. I believe such legislation is just as necessary as that providing for aid to our blind and our old age pensioners, and just as necessary as the family allowance. Every member of this house knows of such people who are very much in need, and I feel that it is our responsibility to provide for them just as we provide pensions for our older citizens.
Along with this, on the domestic side there are no great problems requiring the attention of this house except the implementation of the social security recommendations brought before parliament at the end of the second session. It is admitted everywhere that the present old age pension plan is completely inadequate; and, since the government has expressed a willingness to act provided the provinces will co-operate by endorsing the necessary constitutional amendments, I strongly urge that the government take action on this question during this session of parliament. It is to be hoped that the government will not allow the international situation, serious though it may be, to interfere with this very necessary domestic reform. Relief for our elderly people is long past due, particularly since the inflation of the past few years has cut deeply into the purchasing power of their meagre funds. How some of these people are able to exist is beyond my imagination. I think the Minister of Finance might make use of their advice in his department.
The hon. member for Hamilton West (Mrs. Fairclough) made an eloquent plea to the Minister of Resources and Development (Mr. Winters) the other evening with respect to the housing program. I certainly cannot agree with the hon. member for Comox-Alberni (Mr. Gibson) when he says this plan should not be brought forward at this time.
I do feel that the hon. member's idea in regard to firms building homes for their employees is sound. I also feel, regardless of how many homes are built by firms, by individuals and by everyone who can possibly build, that we will still be far from having enough to supply

the demand for homes in this country, especially if we are going to continue the great immigration program that has been suggested by the government. I am heartily in accord with that program, and I believe every effort should be made to continue to expand home building in this country.
I had hoped, sir, that instead of this announcement by the minister, which cannot fail to have a depressing effect on building, a statement would have been issued to the effect that part IV of the housing act would be proclaimed, allowing for loans on home improvements. The genial Minister of Resources and Development (Mr. Winters) can win friends and influence people by influencing the government to realize the need for reconsideration of this matter.
I should like now to say a word about controls. In September of last year the government asked for and secured powers for controls. We had hoped that the Minister of Trade and Commerce (Mr. Howe) would have made a statement concerning this matter in his speech on February 8. The very least that should be done is for the government to state its intention as to whether or not controls will be introduced. As has been stated by many hon. members in this house since this session began, numerous cases have come to light in which there have been unwarranted mark-ups in the prices of a number of products by some manufacturers who anticipated government action. This increase has been and will continue to be a hedging operation against future contingencies. There can be no doubt about that. I feel that these operations will continue until some measure of controls is put into effect. The simple fact remains that uncontrolled inflation will bring disastrous results to tens of thousands of Canadian people who have practised thrift to provide for their security, and who will find that their dollar is worth approximately half of what it should be. I feel that an immediate statement from the government concerning what it intends to do about controls is necessary.
Some people have asked me what the farmers think of controls and this inflationary spiral. I can say that the position of agriculture today is affected equally by the decreased purchasing value of the dollar as are our urban friends. Dr. E. C. Hope, perhaps one of the outstanding economists in Canada, outlined the situation in an address to the Canadian Federation of Agriculture in Calgary, when he stated that the net income of the farmer reached its peak in 1944 and has since declined despite continued high prices for farm products, until today it is sixteen per cent less than in 1944. He stated, and I am entirely in accord with the main
The Address-Mr. Stick point in his address, that the responsibility and primary function of government is to protect the value of our currency. Inflation, as Dr. Hope clearly pointed out, is the last thing the farmers want. I feel, sir, that an immediate statement from the government is necessary concerning its intention with regard to controls.


Mr. L. T. Stick (Trinity-Conception):: Mr. Speaker, since our last session here last fall you had the honour of representing this house at the opening of the new parliament at Westminster. That you did so, sir, with honour and with dignity is a matter of satisfaction to all of us. I should like to offer you my congratulations. I should like also to join with the others who have preceded me in congratulating the mover (Mr. McMillan) and seconder (Mr. Breton) of this address in reply to the speech from the throne.
Hitherto in this house I have refrained from speaking of things provincial or things pertaining to my riding. I did so for the very good reason that I did not want my presence here to be misunderstood. The entry of my province into union was inclined to be misunderstood, and if I were to bring up provincial matters or matters pertaining to my riding, perhaps I would be misunderstood by the press of this country just as they misunderstood our entry into the union. I believe we have been here long enough now for the people of Canada to understand, so I can now revert to form and in this speech refer to matters pertaining to my province and to my riding.
The hon. member for St. John's West (Mr. Browne) has laid before this house the condition of the people in the fishing industry in Newfoundland. He did so in a very matter of fact way, and I have nothing to say in rebuttal. But I do want to say to this house that this is no new thing in the history of the fishing industry in Newfoundland. Our fishing industry, in common with all the other industries in this country, has its ups and downs. Last year we found we had a surplus of fish on our hands. When we began to market our new catch we found that this surplus brought down prices in foreign markets. That is trade as we know it in the world today. Unfortunately, the position in which we found ourselves was not kept to ourselves, but was broadcast to the four corners of the world. This did not help the industry, and it did not help us to maintain higher prices.
The fishing industry in Newfoundland is vital to the economy of the province. Hundreds of thousands of our people depend upon

The Address-Mr. Stick it for their livelihood. I make no apology tor bringing this matter to the attention ot this house, because unless we can give our fishermen the wherewithal to make a decent living this industry will decline. It will disappear from Newfoundland. Neither my province nor this country can afford to allow the fishing industry to decline in that way.
We have in Newfoundland what is known as NAFEL, which is a marketing organization that markets all of our fish. We have also a salt-cod fishing industry, and there is the federal Department of Fisheries which is represented by the fisheries board of Newfoundland. These organizations and representatives from the fishermen meet yearly, sometimes twice a year, to set the prices which the fishermen get for their catch. It is not mandatory on the purchaser to pay those prices, but I can say here that in the main the recommendations coming from those organizations are carried out. The member for St. John's West said that some of the purchasers paid too little for the fish last year. I believe that to be correct. But I would also like to say that on other occasions they paid more than the price recommended by these organizations.


William Joseph Browne: May I ask
a question? Is it not a fact that this year the joint committee to which you referred did not set the price for fish?


Leonard T. Stick: They did not this year, but they have in the past. The situation in Newfoundland is something we have had for many, many years. It cannot be cured overnight, and it did not come overnight. I suggest to this house that instead of blaming the purchaser or blaming NAFEL or other organizations in Newfoundland, all these organizations should get together in a spirit of good will to ascertain what is wrong with the industry and devise ways and means whereby this industry could be put on its feet. I believe that is a reasonable and sensible way of going about it. I believe a solution of our problem could be found in that manner.
You may be inclined to ask, who are these people about whom I am speaking? Are they worthy of assistance? Let me tell you in all sincerity that these people in Newfoundland who get their daily bread by toiling on the sea, and who face the Atlantic in its calm moods and in its stormy periods, are producing some of the things which you eat here. It is necessary for the economy of this country that we keep the fisheries going just as much as it is necessary to keep the farming industry going. Those men are brave. They face the dangers of the sea day and
[Mr. Stick.)

night. They know what it is to be on the Atlantic when storms are raging, and when the wives and the children at home are praying that they may return safely. Those are the men that helped to keep the Atlantic sea lanes open so that your commerce could travel to and from Europe during the first world war. Those are the men who beat the U-boat menace on the Atlantic during the last war. Those are the men who are today enlisting in the Royal Canadian Navy in such large numbers. They are the men that Churchill called for during the second world war when he wanted men to man the small boats of the Royal Navy. He sent out a special call for them, and he named them the greatest small-boat men in the world. If we get into a shooting war they will respond again as they have in the past. They are willing. I speak on their behalf tonight, and I make no apology for doing so.
For fifteen years in Newfoundland we had a form of government that we called a little dictatorship. You may call it bureaucratic, if you like. We know what we suffered under that regime. In my riding we know how the wharves, the navigation aids and public works generally deteriorated. They were not kept up and they withered as grapes on the vine. I have made recommendations here in all honesty and in all sincerity, which were designed to assist the people about whom I am speaking tonight. I ask for special considera*-tion on behalf of those people. Since I have come here, particularly lately, I have found a certain amount of the bureaucratic business that we had in Newfoundland years ago. We now find that all requests going in are answered with one word "no", that defence comes first, and that we must economize. I would say that there is such a thing as false economy. When those requests are taken into consideration, I hope that those people who live hundreds and thousands of miles from the sea will realize how the people for whom these requests are made earn their daily bread. It requires no brains to say "no". You can teach a parrot to say that. In bringing this matter before the house on behalf of those people I ask, in all sincerity, that they be given the consideration which they deserve.
There is one other matter, Mr. Speaker, which I should like to bring to the attention of the house at this time; perhaps I should say there are two matters, but one is interwoven with the other. Recently we have heard of the huge iron ore deposits in Labrador. It is necessary for the economy not only of Canada but of the whole North American continent that that iron ore be placed in the hands of the steel makers so that we may have the requirements of steel

The Address-Mr. Drew
to meet our needs. That development will take place in two or three years. In two or three years that ore will be coming up and going through the steel furnaces in the middle west and other parts of Canada. I want to make a plea here tonight for the deep water canal on the St. Lawrence seaway.


Gordon Graydon: We are right with you on that.


Leonard T. Stick: When the fathers of this nation looked out upon this country they saw vast tracts of land inhabited by people who were scattered. They conceived the idea of welding this country into one nation and they did it by building railroads. We have advanced from that stage, and last year we had in this house legislation respecting what is known as the trans-Canada highway. That is to further the process of cementing this country into one nation. I submit that today the St. Lawrence seaway is vital not only to the defence of this country but to its economy. Far too long have we waited for our friends and neighbours to the south of us while this project was kicked around as a political football. The time has come when we must act and, if necessary, do so alone. I am informed that this project will cost from $700 million to $800 million and that it will take some four to five years to complete it. In spite of what has been said here in this house this afternoon by the parliamentary assistant to the Minister of Finance (Mr. Sinclair), I am convinced that it is within the capacity of this country to carry out that project, if necessary, alone. I am further convinced that the time to begin it is now. We will welcome our friends in the United States if they come in with us but I say here definitely tonight that we cannot wait longer than 1951 and that we must be ready to begin this project in 1952 even if we have to go it alone.
Last year some of us paid a visit to Windsor and Detroit. We saw the huge industries in that area. Those of us who like the sea and who have the sea in our blood were naturally interested in the water. We saw the huge amount of shipping passing to and fro on that strip of water between Windsor and Detroit, and we were told that that stretch of water has on it the greatest amount of sea traffic in the world, that the amount of shipping passing up and down that river is far greater than that passing through the Suez canal or the Panama canal. From looking at it at the time, I can well believe that statement. I myself have been through the Suez canal on four or five occasions. I have been on defence for two or three months on the Suez canal and I know what traffic goes through it. I ask the house to visualize
what will happen when we get that deep water canal on the St. Lawrence. I say that the traffic passing between Detroit and Windsor can be duplicated on the St. Lawrence and that this seaway will knit this country as it has never been knit before. It will allow the resources of the east to flow to the west and the resources of the west to flow to the east. It will be one other link binding this country together.
We have at this time the spectacle of the shortage of steel. Almost every day in this house we receive new orders with respect to the curtailment of the use of steel. We have the iron ore in Labrador; we have the coal in the maritime provinces, and we have the limestone. Why have we not the steel industry today capable of supplying our needs? I ask this house to have vision and faith. It has been said that as goes the family, so goes the nation. Carved in letters of stone in the peace tower, at the western end, are these words:	Where there is no vision, the people
perish. This chamber here represents the family of Canada. Our forefathers supplied the faith and the vision to make this country great. Is it too much to ask of us here now that we supply the vision necessary to make those projects I have mentioned come to fruition? Inasmuch as our forefathers by their vision made Canada great, is it too much to ask of each one of us here tonight that we carry on in our day and generation the example they set and that we make Canada greater?


Mr. George A. Drew (Leader of ihe Opposition):: Mr. Speaker, before I proceed
with my other remarks, may I say I understand that some remarks were made this afternoon which were intended for my particular attention. All hon. members are well aware of the sad event which kept me away from this house on Thursday and Friday. For that reason it was necessary for me to take some time this afternoon to examine Hansard so that I might know what had been said during my absence. I regret that I did not have the opportunity to hear the remarks to which I have referred. I trust that those remarks were a serious attempt to examine the grave problems now before us.
We are now discussing the amendment moved by the opposition and the subamendment which was moved to that amendment, and which adopted the wording of the amendment, making the additions now under consideration. I think I might read into the record at this point the words of the amendment and the subamendment so that we shall have before us exactly what it is that we are

The Address-Mr. Drew considering in this debate at this very important time. This is the amendment:
We regret that Your Excellency's advisers have failed
(1)	to give this nation leadership in the face of the present grave danger; and
(2)	to bring into being forces necessary to enable Canada to defend itself and discharge its international obligations; and
(3)	to take effective measures to combat inflation and the rapidly rising cost of living.
A subamendment was moved to that which reads as follows:
That the following words be added to the amendment, immediately after the words "rising cost of living" in the last line thereof:
"such as the immediate reimposition of price controls, and the payment of subsidies where necessary, so as to protect the health and living standards of the Canadian people.
That is what we have under consideration; and the vote that will be taken at the time it is called will be upon that amendment, accepted in the subamendment, with the additional words that I have just read.
Before I come to the subamendment I should like to deal with the first two subjects mentioned in the amendment which I moved in the early stages of this debate. It covers three subjects. First, the failure of the government to give leadership in these critical days. Second, the failure of the government to bring into being the defence forces required to fulfil our tasks at this particular time; and third, the failure of the government to deal with the high cost of living and inflation.
First of all, let me deal with the question of leadership or lack of leadership given by the government at this time. After all, on an occasion when we are told that we face as grave dangers as ever confronted western civilization, it is most certainly imperative that the government give leadership to the people of this country as to the nature of the tasks that they must undertake, and as to the way in which they can best contribute to the common effort to be made by all our people.
If there had been any question in the opening stages of this debate about the complete absence of leadership by this government that doubt must have been removed during the course of this debate from anyone who is prepared to examine carefully exactly what the government has put before us during the past two weeks.
First of all, we had a statement by the Prime Minister (Mr. St. Laurent) which indicated what might be done if, as and when the government thought there was any reason to act. Then we had a statement by the Minister of National Defence (Mr. Claxton) in regard to the money to be spent; and we had placed before us, in a cumulative form,

an estimated total of the amount which might be spent over a period of three years. I would remind hon. members that our obligation, our duty and our only right is to deal with the things that will be dealt with in the coming year, although I agree that it is wise to plan for the time ahead.
We knew in advance of the statement by the Minister of National Defence that approximately $1,600 million was to be spent on defence during this current year. What was told us then was not new. It is only a question of simple arithmetic to reach the conclusion that carried forward over a period of three years it would approximate $5 billion. There is not a single member in this house, including the Minister of National Defence, or the Minister of Finance (Mr. Abbott), or the Prime Minister, who has the slightest idea of what the expenditure may be that this country will be called upon to meet if events during this current year should take the course that presented us with graver dangers than those we now face. The whole presentation of this subject was placed before us as though we were in a period of relatively stable preparation for defence, in spite of the fact that we have been told by the government that the next few months may be the most critical in the history of the western world.
Again, the announcements that were made indicated an approach on a long-term basis to the provision of manpower and of weapons, and of the things that are required for the defence of this country. Money is very necessary in preparing for military defence. This parliament and the people of this country have learned that it takes a great deal of money in a free nation to bear the burden of defence. But the actual burden of defence itself is not the dollars that are put forward. Defence rests upon trained men with weapons with which they can defend our freedom.
What we need to know, if the crisis is in the nature of the crisis that has been described to us, is how many men fully trained and equipped and armed this country is going to have on April 1, on May 1, on June 1, on July 1, on August 1, on September 1, during the most critical months that the western world will face for many years. There is nothing in what has yet been placed before us that gives us any real indication of what measures of defence this country actually has, or will have, during these most critical days.
There was one speech from the government benches which approached this subject in an atmosphere of reality-and only one. That was the speech of the hon. member for Quebec South (Mr. Power). In that speech a man.

who had accepted the responsibility of one of the defence ministries during the years of war pointed out the obligation that there is on every member of the House of Commons to know what we actually have to defend this country.
He himself, not unnaturally, indicated his own interest and his own faith in that branch of the service with which he was associated during the years of war. He presented to us reasons why he thought this country should place the utmost emphasis upon the Royal Canadian Air Force and upon the training and equipping of air units. He suggested that members of the house should express their opinions as to the balance of emphasis which should be placed upon one branch of the service and another.
I for one wish to subscribe to the views he expressed, that there are reasons that Canada is peculiarly fitted and qualified to train large numbers of airmen, and that our greatest emphasis should be upon that branch of defence. For at least two years to my recollection the hon. member for Nanaimo (Mr. Pearkes) has been urging that greater emphasis be placed upon air defence; and I am very happy to see that an increasing measure of emphasis is placed upon this service.
I think our geographical position suggests reasons why we can best contribute both to the defence of Canada and any collective effort that may be made, either in Europe or any other part of the world, by those military craft that can move so fast into any area of danger.
There is another reason-and I should like to indicate that this is no new conviction of mine, but rather one I have held for many years. Like the hon. member for Quebec South, I have sought for some time to emphasize the special qualifications possessed by Canadians in this great branch of the military service. In 1930 in a book I wrote under the title "Canada's Fighting Airmen" I had this to say about the particular qualifications of Canadians in this field:
Canada's share individually and collectively was out of all proportion to her population. Not long after Canadians really took up flying in earnest it became apparent that they were at least the equals of any of the airmen in the war. It is interesting to speculate why they displayed such an undoubted superiority in this new service. There must be some explanation for the fact that Canada, with about one-tenth of the white population of the empire, should have supplied one-third of the pilots in action with the Royal Air Force at the end of the war, and there must also be some explanation for the individual dominance of Canadians among the British fighting pilots. Perhaps the wide horizons of life in Canada, the atmosphere of optimism, the confidence of individual opportunity, and the general adaptability to unexpected tasks bom of life in a rapidly developing country all contributed to the
The Address-Mr. Drew qualities which so peculiarly fitted Canadians for success in this new and incalculable adventure. Whatever the reasons may have been, the simple fact remains that, without any qualification as to population or otherwise, Canadians proved themselves the greatest air fighters on the side of the allies. Their exploits should be an inspiration to young Canadians for all time, because at the height of their glory these men were mere boys, and what Canadian boys did then forever avoids the necessity of seeking beyond the borders of Canada for examples of the highest bravery, devotion to duty and self-sacrifice.
Those same qualities were shown during the second world war. Those same qualities are possessed by young Canadians today, and I think there are good reasons why the utmost emphasis should be placed upon this service. There are also reasons why emphasis should be placed upon the equipping and training of airborne troops. There are also reasons why emphasis should be placed upon the equipping and training of fast armoured units which can train in the great spaces of this country and be moved rapidly into any threatened area. There are also reasons why, with our great coast lines, and the fact that there is good reason to believe that the danger spots where trouble might arise may be some distance from our own shores, we should build ships of a type which would make it possible for those young men and women who have shown such great adaptability for naval service to continue that service wherever Canadians may be required to assume the collective responsibilities they have accepted.
Then we come to the land forces. In that we still depend to a very considerable extent upon the reserve army, which can be organized here in Canada and can be brought into a position to defend this country during a period when any threat might present itself.
No one should underestimate the importance in the Canadian defence plan of the reserve army. One of the things that have not been answered in the debate, but which should be answered, is the statement by the senior officers of all the associations representing the different branches of the land forces, that any suggestion that the number of men we have in the reserve is an effective force for the defence of this country is a travesty of the facts. These men who made that statement are the men who know best of all what the state of training of the reserve units really is. They know better than the Minister of National Defence (Mr. Claxton). They know better than the general staff. They know better than anyone else because they are the ones who are actually assuming responsibility for that training. They have made the bald statement that we are not getting full value for our money in reserve

The Address-Mr. Drew
training, and that any statement that we have 40,000 effectives, which has been made over and over again, is a travesty of the facts.
This is not a time for us to be given any statements which do not clearly and accurately represent the situation with which we are confronted. Examine the speech of the Minister of National Defence. It tells us how much money the government may spend. It tells us what units may be raised with the money to be spent, assuming that it is still dollars of the same kind. It tells us also some of the general plans, but it does not tell the members of the house what the defence forces are that we have today, what the state of our defences actually is, how ready we are to meet any threat that might confront us, or how ready we are to accept our share in any collective responsibility that we have assumed.
The hon. member for Quebec South (Mr. Power) raised an extremely important point when he said that one of the great problems confronting us now, when so much power of necessity is assumed by this and other free governments in the face of threats of this kind, is to find a method by which members of parliament can be fully informed and assume the responsibility which it is their duty to assume before they pass the votes of money which they are called upon to pass. The hon. member for Quebec South supported the idea of a committee to examine defence so that members might be informed. He pointed out that such a committee should not be permitted to deal with questions of policy. I agree with that. At no time have I suggested that a committee should deal with questions of policy. Policy must be the exclusive responsibility of the government. What I have urged is that there be a committee which can examine the facts so that in turn the committee may report to the house and the house may know what the state of the defences of this country really is in these most critical days.
In the various things that have been said, suggestions have been made that staff officers be called before that committee, and if in any of those statements the government has interpreted the argument as an argument that such a committee be permitted to deal with questions of policy, may I remove any suggestion of that kind. The suggestion has been made, and my argument now is, that such a committee is essential if members of the house are to have the facts in regard to defence which they should have if they are in fact going to perform their duty and their responsibility as representatives of the people of Canada at this time. Short of that we have no adequate information. Short of that we are passing over this great subject with 

a statement as to the amount of money to be spent. What do members of this house know about the state of our active force? I have sought to ascertain what the state of our active force is, that almost forgotten force which was by-passed when it came to the acceptance of responsibilities under the United Nations, that magnificent well-trained force.
Do not let members of this house be asked to accept the explanation that the airborne brigade was kept in Canada to defend Canada in the event of attack. The aircraft which could have carried the airborne brigade into action were sent outside of Canada, and they cancelled their training last autumn because of that fact. Today we have land forces of at least three different types. We have the special force; we have the active force, which seems to be particularly for the defence of Canada; and we have the reserve force, as well as such other forces as might be brought into existence. Surely members of the house have a right to hear a discussion of this subject and opinions expressed as to the organization of military forces which will most effectively deal with the tasks before us.
That is not a question of government policy. It is a question of the presentation of facts upon which members of the house can then make their arguments as a result of which the government in turn would decide policy, which is its responsibility. Most certainly the thing that is creating an atmosphere of uncertainty and confusion in Canada today is the absence in the house or outside of that detailed information which is so essential if we are going to assume our responsibilities. For that very reason I once again repeat my earnest request to the Prime Minister (Mr. St. Laurent) that the government agree to set up a committee to examine the whole subject of national defence, recognizing that there will be subjects that must be kept behind the veil of secrecy but recognizing also that this house is always ready to accept any reasonable explanation in that respect, and has never sought to violate the secrecy essential in cases where real secrecy is needed.
When it is suggested that this would be taking over the responsibility of government, may I once again point out that surely external affairs are just as much in the realm of secrecy as national defence, that a committee is set up to deal with that subject, and that it has never been suggested at any time that the external affairs committee is usurping the authority of parliament. There is plenty of evidence of what has been accomplished by committees in other countries. I have been told by those in a position to know-and I am sure other members of the house have

received the same information-that one of the reasons that little Finland was able to make such a magnificent stand against Russia in 1939 was because a committee of their parliament had been set up to examine national defence, and that committee made recommendations which led to a reorganization of the defence forces of Finland as a result of which we had that sublime act of courage when that little nation stood against the full force of communist slavery. We would reap the same benefits. We would receive information to which we are entitled, and I hope that, at this stage of the session, when it is so important that we proceed with knowledge of the subject we are discussing, a committee of that kind will be set up.
Then let us examine the information placed before us by the Minister of Trade and Commerce (Mr. Howe). Surely there was a complete absence of leadership there. If any member of this house knows definitely any more than he did before that speech, he has been able to find in it something I could not find. That speech was simply a statement that certain things may be done some time; that some things are under serious consideration. This is a time for serious consideration, Mr. Speaker, but it is also a time for action; and the time for action is long past in regard to some of the subjects that were discussed by the minister.
One of the most remarkable things to have been presented during this debate, either inside or outside the house, is the suggestion that it is not necessary for us to tackle some of these problems because the people of the United States are also tackling them and this may be adequate for our requirements. Surely the sovereignty of this country, the sovereignty of this parliament, suggest that no member of the Canadian government should stand in this house and say he expects that the things done by some other nation are going to be adequate to deal with the problems we are called upon to face. This parliament has the responsibility of dealing with its own problems. Today as we prepare for defence, as the enormous sums of money that will be called for will be spent, we know that the inflationary pressures in the country will be infinitely greater than they are at present. We know we have not yet even felt some of the inflationary pressure already created. We know some raw materials are going into industrial production which cannot be replaced at the same price. We know that when those raw materials must be replaced the prices will go still higher, simply from the evidence of what those raw materials cost today. We have seen what has been happening in connection with inflation. We know 80709-19
The Address-Mr. Drew how it has been increasing, and we also know the whole tendency will be for it to increase still further unless effective steps are taken to bring it under some measure of restraint.
It is not necessary to remind some members of this house of what has happened; nevertheless it is important that we all bear in mind what has been taking place during the past few months. In 1949 the cost of living index had risen to 160-8 and people were getting seriously concerned about it. For the last month of 1950 it had climbed to 171-1. During the twelve months of 1950, the cost of living climbed 11-5 points, or practically one point a month. Some of the statements being made on behalf of the government gave us every reason to hope that this tendency had been checked, but the latest bulletin issued on February 2 of this year shows that the general cost of living index is now 172-5. The government has given some indication that it may deal with this subject by controls, but it is not yet prepared to say exactly what it is going to do or what form the steps it has under serious consideration may actually take.
Today, Mr. Speaker, we are not dealing simply with a cost of living index as such. We are dealing with a situation that is threatening the people of this country with a measure of insecurity they have not known for many years, a measure of insecurity in no way related to the apparently high income our people are earning at the present time. One of the things that must be borne in mind in all these discussions is that it is no use talking about the high national product in terms of dollars unless we talk about that national product in terms of what those dollars will buy, and what kind of dollars they really are. After all, the national product of France today in francs is many times what it was in 1914; the national product of Italy is many times what it was in 1914, in lira; but it is a very different figure when you examine those units in terms of money value today, and in what they will buy. What has been happening in Canada in the past few months should be an indication and a warning that here, as in other countries, that same dangerous course may be run unless with all the vigour, all the ingenuity and all the initiative we possess we deal with the emergency that is actually upon us in regard to the cost of living.
There is no one here who does not know from his own personal contacts the desperate position in which many people are living today. A man earning $120 a month may be called upon to pay $50 or $60 for rent if he has a family. He may be called upon to buy fuel in addition to that, and then food. Where

The Address-Mr. Drew the money is to come from for clothes and all the other incidentals is hard for anyone to imagine. Yet that is the reality with which we are actually confronted at this time. This government, through its lack of leadership, is primarily responsible for the inflation we see in Canada today. The Prime Minister (Mr. St. Laurent) laughs. This is not a laughing matter. Certainly it is not a laughing matter to the people who are trying to find out how to make their dollars go around at this time. It is not a laughing matter for the people to have invested money in insurance for their own protection, and who know that the dollars they get from that insurance are worth only a little more than fifty cents as compared with the dollars they put in.


Louis Stephen St-Laurent: On a matter of privilege, Mr. Speaker, I cannot permit the leader of the opposition (Mr. Drew) to suggest that I was laughing at the predicament in which we all find ourselves because of inflation. 1 was laughing at my hon. friend's assertion that the government was responsible for the inflation that has taken place.


George Alexander Drew: This is not a laughing matter for those who have put their money in the banks in the form of deposits, in order to protect themselves. Nor is this a laughing matter for those who have put their money in government bonds which they have been told was the safest form of investment into which they could put their money. The Prime Minister (Mr. St. Laurent) says that he is laughing at the suggestion that the government was responsible. The government is responsible. The government has not taken one single step, since the pressures were placed upon the economy of this country, to check inflation by any of the several measures they could have taken to deal with this subject.
Mr. Speaker, I know that those people of Canada who are concerned about the value of money today will be interested to know that this is such a humorous subject to some of the members on the government side. This government had it in its power to do a number of things that would have greatly helped to meet this situation. Those things were pointed out many times. One step that was suggested was that the government cut down on non-defence spending. Those members who have an interest in the affairs of parliament, and who follow the debates in parliament, will know that it was in this parliament that the suggestion was made that, if savings were effected here comparable to those indicated in the United States by a similar commission, they could amount to $500 million a year in Canada.


Mr. Cavers:: Explain fully.


George Alexander Cruickshank: Can we laugh now?


George Alexander Drew: Mr. Speaker, there are certain members in this house who know nothing better than to laugh, and who have made no better contribution.
Those members who have followed the debates in this house will also recall that at the time that proposal was made it was pointed out that the way that this could be done would be by an examination, in exactly the same way that any big business would deal with its own problems. It was pointed out that if that were done the members of this house could offer many suggestions as to the way savings could be made. This is not something that is confined to Canada alone. This is something that affects every one of the free nations today, and in every one of the free nations the emphasis is being placed upon the need for cutting non-defence spending. As yet we have no evidence of any real attempt by this government to cut the non-defence spending which has been built up.
I recall another occasion when the Prime Minister, with good humour-


James Sinclair: As always.


George Alexander Drew: The Address-Mr. Drew with which this and every other free nation is now confronted. But, Mr. Speaker, it is only an attempt to be doctrinaire from another point of view to suggest that there is a free economy in which the movement of prices, on a competitive basis, offers protection to the public when any large part of the basic commodities, supplies or production of any kind is bought by the government for special purposes with the money appropriated by this house, and that much of that production or of those commodities is removed from the ordinary free competition within this country. The moment that any substantial part of any commodity or of any type of production is bought directly or indirectly by the government, then the free economy is no longer operating in relation to the balance of those supplies. Any failure to take effective steps to deal with the balance of those supplies is simply playing into the hands of the speculators and those who will be able to make money at the expense of the general public. I believe that our free economy may be gravely threatened, and soon, unless this runaway inflation is brought under control. I for one believe that it is essential that, to meet this immediate emergency, there be price controls which will protect the public from the abuses that are arising at this time.
By all means let us have the highest measure of freedom within this economy of ours, but let us face the simple reality that the water is running over the dam so fast that unless flood gates are provided right away this flood may carry away the savings of our people and that free economy which is being asserted as the reason for not doing anything at this time. After all, communism can win this struggle in more ways than by force of arms. That has been said in this house before. Communism has already extended its dreadful slavery to large parts of the world without moving a single armed man across the borders where communist dictatorships have been set up. There are other ways that communism can be spread; and one of the ways that the communists have said they would seek to spread their dreadful disease is by undermining the economy of the free nations so that the destruction of that economy would open the door to this dreadful form of slavery that they are trying to impose upon the whole world.
People did not believe Hitler when he wrote in "Mein Kampf" exactly what he intended to do, namely, to enslave Europe and the rest of the world, and too late the world came to realize that he meant exactly what he said, and that he intended to carry out that plan. Stalin has told us in just as clear
[Mr. Diew.l	.
terms what he and the Russian dictatorship intend to do. They plan to extend their control over the whole world; not so much by force of arms as by the threat of force against countries where the economy has been undermined through the many activities that they carry out.
Every point that our cost of living goes up is something that will bring satisfaction in the Kremlin. I would not be surprised' if on the walls of the Kremlin, probably opposite the walls where they have all the maps of free nations they have absorbed in other ways, are charts showing the dangerous trend in the free nations and the threat that there is to the free economies which they are seeking to destroy. It is just as important in this country today to protect our dollar, the dollar which our people need for their daily lives, for their savings and for their security, as it is to build the bulwarks of freedom of other kinds. Neither can be neglected. Both these great efforts should go on side by side and simultaneously, and the time to deal with the threat to our economy is now long overdue.
In so far as our amendment is concerned, Mr. Speaker, it was intended to cover the field of inflation. We express regret that the government had failed to take effective measures to combat inflation and the rapidly rising cost of living. These are inclusive terms. Certainly these terms include price controls where price controls are necessary. Certainly, these words include subsidies where subsidies are necessary. But they include several other things as well. To any of those who may find some measure of amusement in an assertion of that kind, may I point out that I had the responsibility-and I accepted it-of introducing certain subsidies in the province of Ontario at a time when the dominion Minister of Agriculture was failing to protect certain of our important crops that faced a very dangerous situation indeed.
For instance, in Ontario we found it necessary to provide a subsidy for sugar beets, a subject of which the Minister of Agriculture has had some recent experience. This of course was on an earlier occasion. There was a serious shortage of sugar in this country at that time and the production of sugar beets was seriously threatened. I have no apologies for accepting the responsibility of introducing a subsidy to continue the production of that crop, while at the same time I disbelieve in the general principles of subsidies except where they are actually needed to meet an emergency of this kind. We introduced subsidies to assist hog production, to assist cheese production and to assist production of other kinds.

I have had experience in this before, and I know there are occasions where the nature of the emergency demands that we deal with these things in terms of reality and meet the situation head-on, and do the things that are needed to be done to deal with the problem that is before us.
In this subamendment there are the governing words, "if necessary". And that is exactly the meaning that I take from these words. But if it had been intended to amplify the words in our motion we would have amplified them a great deal more than this. The fact that we have not, however, does not make the reference to these objectionable; because quite contrary to what some hon. members have suggested, this subamendment does not leave the whole question of inflation upon these two subjects alone. It says: "such as price controls and subsidies where necessary".
Much has been made of the words, "reimposition of price controls". I grant you that I do not like the word "reimpose"; but what is it that we are talking about? We are talking about price controls, but not necessarily price controls of the same kind that we had before. No; Canadians have got too much initiative, too much ingenuity, too much intelligence not to have gained a great deal from the experience of the last war. And in dealing with the problems now before us under different circumstances, and meeting a longterm situation, I am perfectly certain that the price controls that would be devised to meet the emergency with which we are now confronted would be a different type of price control from those that were imposed before. But I am not going to engage in an exchange of dialectics and argument about whether some inference can be drawn from the word "reimpose".
This refers to price controls; this refers to subsidies. It leaves it open to deal with any other things than can be done to stem inflation in this country. I am going to point out some of the other things that are covered under these general terms that were used in our amendment. First of all is the reduction of non-defence spending by this government, and a substantial reduction of non-defence spending. Second is increased production in every line of production which will not only meet our military requirements, but which will meet the daily needs of our people and by that very fact ease the strains and pressures of inflation itself. And third, we should encourage immigration on a scale which will bring to our country people with skill and stamina who believe in our methods, so that we may spread the burden we have assumed over a larger population within this vast land of ours. And fourth, we should most certainly remove anything that will
The Address-Mr. Drew discourage the people from building houses at a time when we are also encouraging immigrants to come into this country.
Anything more badly conceived than the plans of the government to reduce demand by creating the necessity for a higher down payment would be difficult to imagine. We have no lack of raw materials in this country. We have no lack of resources. We have resources in this country beyond the dream of most nations in the world today. What we need at this time is for this government not to place restrictions upon the building of houses at the very time that we are trying to convince the people that our way of life is the best of all, but to encourage them to build houses where you create the whole foundation of your society.
Then again another point is that this house should insist upon every step being taken which will assure that we get full value for every dollar spent on defence. This house should insist upon every step being taken which will assure that we get full value for every dollar spent on defence. We know we are not getting it today.
Then we should also demand, with the hope that this demand would not be confined to one side of the house, that the government use the very wide powers it has to deal with the credit of this country. After all the Bank of Canada was set up with its very first declared purpose being the supervision of the credit and economy of the country to the best advantage of the people of Canada. The government, through the agencies it has created, has it within its powers to do several things that will help to prevent this runaway inflation that is now before us.
Then again we come to the question of controls. Most certainly we urge that, to meet this emergency with which we are now confronted, there be controls, where those controls are needed, to bring the dollar into some real relationship to a proper value, and to create a measure of stability which will restore the confidence of the people of this country in their bank savings, in their insurance, in their bonds, and in other things which are so necessary if we are going to carry forward a free economy.
Surely the government should be very conscious of the danger there would be in putting out a bond issue by the government to meet our defence requirements, unless there was some measure of assurance that the people who put up their money are going to have reason to believe that it will be at least a somewhat similar dollar they will get back when those bonds mature.

The Address-Mr. Drew
That is not suggesting that the people of our country are going to reduce their patriotism to dollars. But at a time when the government is urging the people to put money into those bonds as the safest investment in the country, then the government has the responsibility to make them the safest investment. The fact is that they have not been the safest investment, and that during these past few years-during this past year particularly-there has been a real threat to investment in those bonds, which is now a subject which should cause serious concern to the government and to the people of Canada.
In passing I shall refer to another subject not unrelated to investments. The stock markets of Canada serve an important and useful purpose. In a free economy those stock markets provide the opportunity to buy and sell securities which finance the great developments under our economy. There are still people who express some measure of surprise that at a time when events are undoubtedly serious the stock markets should be rising, rising, rising, to a point where it is strangely reminiscent of the days of 1929. Why is that? Is it because the people of Canada are confident that these stocks are worth more every day? Some of them, yes. But the real reason that there has been this constant and rapid rise is the concern of many people as to the continuing value of the dollar; and they are putting their money into what may be regarded as equity securities which bear a proportionate relationship to some fixed assets which change with the changing value of the dollar. And yet part of the increase in the value of securities in this country has been an increase that has been related to a flight from the dollar itself-


Douglas Charles Abbott: Nonsense.


George Alexander Drew: And I hear the Minister of Finance (Mr. Abbott) say "nonsense." If any word could demonstrate how unfitted he is to be Minister of Finance, it is that word. The Minister of Finance obviously does not read the financial papers which are subscribed to by the people employed in his own department to give expert advice. The minister is disregarding what is being said by those who have been observing this phenomenon for some time; and the minister knows perfectly well that in other years, as well as this year, when there is inflation in this country or in other countries, there is a corresponding increase in stock values related to the fact that inflation itself carries those values up. In that, of course, I am referring to common stocks, because it is the common stock which has the equity value in the assets of any company.
[Mr. Drew.)

It is time that, in addition to urging there be some effective measure of control over those things which are threatening our economy, the people of this country should also come to realize that there is no easy way to wealth, that real wealth is earned only by hard work, by initiative and by ingenuity. And it will be a healthy thing in this country if some measure of caution is displayed by the people at this time, and that they should not believe that the stock markets in Canada or in any other country always go one way. Because, while it would be certainly very unwise that anyone should ever sell Canada short, it would also be unwise that the people of this country should come to regard stock exchanges as gambling casinos where they are simply tossing money down for chips of one kind or another which they buy and put on some gambling device. That is not what stock markets are. Stock markets provide a very real and important function in our economy. Their place will best be held and the service they can offer will best be performed when everyone recognizes that the value of those exchanges should be related to the actual value of a security itself, and related to the production of any particular company.
I come now to the question of how these things can be done. If the government does adopt a stabilization policy, if the government does make a real effort to stabilize the dollar, controls alone will not do the job. Controls alone might only aggravate the situation and create new problems in years ahead. The whole problem must be tackled, along with imposing those restraints and controls made necessary by the action of the government itself. And the government should also take these other steps which can be taken for the benefit of all the people of this country.
I spoke about the necessity for increasing production. Taxes imposed should be taxes which will encourage savings. Taxes imposed should be taxes which will in every way possible not stifle the productive capacity and productive effort of this nation. There are taxes which can be borne by the people of this country without placing any shackles upon the great productive capacity of Canada. There are other taxes which would greatly reduce our ability to meet the demands ahead. The mainspring of a free economy-and it is a free economy in which I believe and a free economy which I hope we will preserve-is the hope of getting more in the form of money or goods or other things for the efforts that are being made, and of being able to create security, comfort and happiness for your family by saving from what you earn. If the

safety of bank deposits, insurance, government bonds and other investments of our people is threatened, then in doing so the very mainspring of our economy is threatened as well. In imposing the taxes that will be imposed upon the people of this country to meet the heavy demands ahead, every single thing should be done to see that they are imposed in a way that will make it possible for production to meet the demands of our people while at the same time meeting defence requirements.
For that very reason it is to be hoped that the government will give an opportunity to the house at the earliest possible date to deal with the estimates, to examine them and to see what actually can be done, by suggestion and otherwise, to improve the situation. I have directed criticism to what I believe the government has failed to do. But to the extent that the government really meets its responsibilities, to the extent that this government really shows a determined effort to stem the tide of inflation, I am sure they will get the support of every member of the house no matter what criticism may have been directed to what has taken place in the past.
For the reasons I have mentioned it is my intention to support the amendment to the amendment. In doing so I have indicated that the subjects discussed are subjects to which we have referred. If I had drafted the subamendment I might have changed the wording of it, and would; but what I point out is that the one way in which members of the house have an opportunity to protest against the inaction of the government is to vote on a subject of this kind without too much attempt to get down to the last possible meaning of every word in the amendment to the amendment now before us. I hope that it will not only be members on the opposition side of the house who will indicate to the government that they want some action, because I know, and every member of the house knows, that there are members on the government side as well who believe that conditions in this country today are such that they demand immediate and vigorous action, and that the urgency which has been suggested is not only an urgency related to defence preparation but also is a great urge^y related to the preservation of our free economy and the welfare of our people.


Douglas Charles Abbott: Mr. Speaker, it would seem appropriate at this point that I should say something on the third point in the amendment moved by the leader of the opposition (Mr. Drew). The amendment reads in part:
We regret that Your Excellency's advisers have failed . . .
The Address-Mr. Abbott
(3) To take effective measures to combat inflation and the rapidly rising cost of living.
At the same time it will afford me the opportunity of accepting a suggestion that was made in my absence the other evening by the hon. member for Vancouver-Quadra (Mr. Green). At page 165 of Hansard he said:
I also believe that it would be most opportune if the Minister of Finance were to make a full and frank statement in this debate on ways to prevent inflation. I realize that price controls are not a cure-all, but I believe it is the duty of the Minister of Finance to tell the house, and through us the Canadian people, everything that can be done. There is little understanding throughout the country of the underlying causes of inflation or of the best remedies. We hear, for example, such recommendations as these: that individuals should increase their personal savings, that the government should cut out every unnecessary expenditure, that there should be heavier taxation, that there should be restriction of credit, that there should be an allocation of scarce materials, that interest rates should be raised so that persons having savings accounts, for example, would receive a higher rate of interest and thus would be encouraged to save rather than spend; we hear that there should be increased individual production.
In the course of his remarks the leader of the opposition has said that he considers that the government is primarily responsible for the inflationary situation which admittedly exists today. He went on to say that the government had not taken one single step by using measures open to it to check this inflation. Then he proceeded to enlarge at various times on what he considered to be the cure for this condition. I must confess that I am in complete agreement with a number of the suggestions that he made, but in the course of his remarks he contradicted himself so many times that I am really not just sure what he would do if he had the responsibility of directing government policy.
I am very happy to accept the suggestion of the hon. member for Vancouver-Quadra and discuss what I conceive to be and what I think are generally recognized as the fundamental causes of inflation, and what are the best ways of meeting it. Before I do that, however, lest anyone may be under any misapprehension that the Minister of Finance is not just as much concerned in doing what it may be possible to do to check inflationary tendencies, let me hasten to disabuse his mind on that point. I do not want to introduce a personal note into these things but
speaking as an individual, in common with perhaps a number of others in this house, I have the greater portion of my savings in the form of life insurance, and I am just as much interested in maintaining the integrity and the stability of the Canadian dollar as any other member of the house or any other

The Address-Mr. Abbott
person in Canada. Therefore do not let anyone think that this matter is being taken lightly by myself or by the government.
As I had occasion to say at the special session last September, the root cause of any sustained inflation is an excess of spendable income as against the available supply of goods at current prices to meet it. Consequently the fundamental cure for an inflationary situation is increased production and, if necessary, draining off such excess of spending power as may exist; in other words, maximize production, minimize waste and reduce competitive expenditures such as government expenditures. I think those principles are recognized by all students of this sort of thing. That is the fundamental attack on inflation, and any other collateral remedies, such as controls, which I shall deal with a little later, are useless-they are only auxiliary-unless the fundamental fiscal and monetary policy which attacks inflation at its root is followed through and followed through vigorously.
My hon. friend said that the government had done nothing to check these inflationary forces. Before I touch on that perhaps I might say that I agree in large measure with the enumeration made by the hon. member for Vancouver-Quadra of the various steps which should be taken to attack inflation at its source: increased production; all fiscal and monetary measures such as reduced government expenditures; heavier taxation; budgetary surplus; increase in the interest rate; decrease of credit; reduced personal consumption; higher personal savings; reduced capital expenditures by business; direct controls; the allocation of scarce materials, and so on. With that enumeration I agree; those are various methods by which inflation can be attacked at its source.
Let me point out briefly to the house what has been done as a result of government policy since early last summer, when the admittedly strong inflationary forces which exist today first began to make themselves apparent. I said this in September, and I repeat it today. Early last spring it appeared that the strong post-war inflationary forces had run their course and that prices had pretty well levelled off. Then, of course, came Korea, and since the end of June or early July world conditions have made for the creation of strong inflationary forces not only in Canada but throughout the whole civilized world.
First, what are the fundamental cures for inflation? Increased production. A good deal can be done in that field by increasing efficiency, by getting more elderly people into the

working force, by employing more women, by all of us working a bit harder and if necessary a bit longer. As has been said before in this house, 'we are in an economy which is working pretty well at capacity. I think there is room for increased production by some of the means I have suggested; by improved efficiency, by harder work, by bringing in older groups, and so on. But the extent to which we can carry our greatly increased defence effort by increased production is limited, as I have said before. The weight of defence superimposed upon an economy already operating at a high level will mean inevitably that it must be at the expense of some of the goods and services we now enjoy as civilians. In other words the people of this country as a whole must expect a reduction in their present standard of living.
So much, then, for the effort to increase production. That is something in which the government as such can exercise little direct influence. I have used such powers of exhortation as I possess to urge all Canadians, individuals and employers and others, to endeavour to increase efficiency and production; and, Canadians being what they are, I am confident they will do so.
The second point is the use of the fiscal and monetary weapons. The hon. member for Greenwood (Mr. Macdonnell) made a speech the other evening to which I listened with great attention and interest. He seemed to imply that we had done nothing in this field. I could not make out, any more than I could from what the leader of the opposition (Mr. Drew) said, just exactly what he thought the government should do, but I gathered that somehow or other we had failed to exercise some controls over the banks, as to the type of loans they should make. Let me enumerate briefly some of the things the government has done in the fiscal and monetary field. First I come to the reduction of government expenditures; and my hon. friend the leader of the opposition has strongly urged that we should effect a reduction in government expenditure on civilian account. I agree that we should effect every dollar of reduction we possibly can, because the demands of the government are competing with other demands, and consequently to the extent those demands can be cut down it helps reduce the inflationary pressure.
As soon as the added responsibilities which were to fall upon us as the result of the outbreak of the Korean war became apparent, we inaugurated a detailed review of government expenditure. I requested all departments to review their programs for the current year and postpone or eliminate any expenditures which could properly be postponed or eliminated. The house will appreciate that where

The Address-Mr. Abbott
works are under way or contracts are let, it is not easy to do that quickly; but I am happy to say we have achieved substantial results in that regard. The expenditures for the first nine months of this year, up to the end of December, are below those of last year in most departments. They are substantially below the estimates presented to and voted by this house; and I venture to say that when we close our books at the end of this fiscal year a very creditable result in the way of a reduction in controllable civilian expenditures will have been achieved. In both my budget speeches last year I made appeals to provincial and municipal governments to cut down as far as possible on their Inon-essential expenditures, and I have directed similar appeals to corporations and private individuals.
In the next place, by way of fundamental attack on the inflationary problem, we have not only been following a full pay-as-you-go policy, but today we are running a substantial surplus, which means that we are taking out of the spending stream more than we are putting back in the shape of the goods and services we are buying from the people of Canada. I never like to compare ours with other administrations, but the United States administration has been appealing for just that sort of thing. We have done it both rigorously and effectively, and in fact the budgetary surplus of Canadian federal government expenditures for the calendar year 1950 would run very close to $450 million. That surplus is still running high in these last few critical months, and that has been so for two reasons. The first is because our actual expenditures are running substantially below the estimates which were approved by this house, and in the second place because our revenues have been running substantially ahead of the revenues I estimated both last March and last September. Still we have been making very effective use of the budgetary weapon by not only fully balancing our budget but by actually attaining a substantial surplus.
In addition to that we have been making, in my judgment, full use of all practical monetary policies. As the house well knows, the Bank of Canada raised its rediscount rate last October. While the rediscount rate has perhaps ceased to have the significance it had a few years ago, interest rates have been allowed to rise; and the changes in those rates, particularly in the short-term rates, have been quite significant. But perhaps most significant of all in this use of the monetary weapon to attack the inflationary forces was the action we took last summer to offset the inflow of capital from the United States prior to releasing the exchange rate of the 80709-20
Canadian dollar. The house, of course, is aware of that huge inflow; 1 have referred to it before. The increase in our reserves in the third quarter of 1950 exceeded $536 million, and for the year as a whole amounted to the tremendous total of $625 million.


James MacKerras Macdonnell: Caused by your unsound policies.


Douglas Charles Abbott: My hon. friend says it was caused by something or other-


Julian Harcourt Ferguson: By your unsound policies, in case you did not hear it.


Douglas Charles Abbott: That may be, but others do not share that opinion. In the circumstances of this huge inflow of capital, which as anyone who knows anything about these things appreciates was bound to have a highly inflationary effect upon our economy unless measures were taken to offset it, we were very fortunate that we did have a large cash surplus in our government accounts which enabled us to finance an important part of that increase without recourse to borrowing.
It is true, as was pointed out by the member for Greenwood (Mr. Macdonnell), we did have to have recourse to additional borrowing to the extent of $200 million of the $625 million. But in addition to the use of that large cash surplus, the Bank of Canada had to take, and did take, aggressive action to hold down the cash reserves of the chartered banks. A study of its weekly and monthly statements will show that during those few critical weeks to which I have referred the bank sold several hundred million dollars of government securities out of its portfolios in the open market.
In his remarks the other night the member for Greenwood (Mr. Macdonnell) seemed to me-perhaps I am doing him a bit of an injustice-to flounder around a bit in discussing the central bank's capacity to control loans by the chartered banks. I must confess that I was not sure what he had in his mind, and I do not know whether he was quite clear in his own mind. He certainly did not make it clear to me.


James MacKerras Macdonnell: Would the hon. member permit a question?


Douglas Charles Abbott: Yes.


James MacKerras Macdonnell: Would the hon. member be surprised to know that the governor of the Bank of Canada, when giving evidence before the House of Commons committee on prices in 1948, said precisely what I said the other night? If the minister would be interested, I could read briefly from the committee report.


Douglas Charles Abbott: The hon. member did not give him credit for it in his speech.
298	HOUSE OF
The Address-Mr. Abbott


James MacKerras Macdonnell: I complained the other night that the power had not been exercised. If I understood the minister correctly, he took me to task for suggesting there was any such power or influence. I now read briefly from what the governor of the Bank of Canada said in. 1948, with the minister's permission:
There is one point I should like to mention in connection with the activities of the central bank and that is the extent to which we maintain touch with and have consultations with the commercial banks;
Then, later he says:
Later on, in February, 1948, . . . we did express the view of the banks that under existing conditions, when the rate of capital investment is pressing on relatively scarce supplies of manpower and materials, it was undesirable to finance capital expenditures through the expansion of bank credit.
That was the point I brought up the other night, when I pointed out that current loans had gone up by hundreds of millions and which I understood the minister questioned as being within the power.


Douglas Charles Abbott: I thank my hon. friend for the explanation. I understand now what he was driving at. At the time I thought he was suggesting that the central bank should exercise some sort of supervision over the granting of loans by the chartered bank. We all know, of course, that the function of a central bank, such as the Bank of Canada or any other central bank, is to consult from time to time with the commercial banks and to express to them such views as may seem appropriate as to credit policy. I think probably we can take it for granted that that course of action has been followed by the Bank of Canada. I am glad to know that my hon. friend did not suggest that the Bank of Canada should go over the loan portfolios of the banks, and attempt to indicate the loans they should make, and for what purposes.


James MacKerras Macdonnell: The minister brought up that clever point himself.


Douglas Charles Abbott: I thank my hon. friend for
the compliment.
I do not mean to suggest that the policies which I have been outlining, budgetary policies, monetary policies, fiscal policies and so on, can operate perfectly under all conditions. For instance, with the soundest fundamental anti-inflationary policy in the world, a completely balanced budget, a full use of the interest rate, and so on, if people will not accept the inevitable consequences of the draining off of supplies as a result of the war effort, and insist on wage increases in order to compensate for the increased costs of war, or if they insist on utilizing


past savings to maintain their present level of consumption, then of course the pressure on available supplies will not, for the time being, be significantly lessened by the operation of these fiscal measures.
Some member, I forget who it was although it may have been the member from Greenwood, referred to the freeing of the Canadian dollar in September. As anyone who knows about these things will appreciate, that was, in itself, an anti-inflationary move.


James MacKerras Macdonnell: Somewhat
delayed.


Douglas Charles Abbott: Here I should repeat that we are continuing our efforts, I am continuing my efforts, to push aggressively all appropriate means to encourage the people to increase their personal savings. I deprecate more than I can say, Mr. Speaker, the words of the leader of the opposition (Mr. Drew) tonight, when he purported to cast doubt on the stability and strength of the Canadian dollar. If responsible public men stand up in this house and attempt to convey an impression to the public that the Canadian government bond is not worthy of confidence -well, I would hate to take the responsibility involved in making a statement of that kind.


George Alexander Drew: I would hate to take the
responsibility of doing nothing to protect it.


Douglas Charles Abbott: My hon. friend contented himself in his speech with making assertions, and I have been outlining some positive measures which have been taken to protect it.
On the question of direct controls, one of the few positive things he said in his speech was that he was for price control. He did not say whether it was over-all price control. He carefully skated around the inevitable corollary of wage controls, but he did say he was in favour of some measure of price controls. The government has had some considerable experience in the administration of price controls, both on a selective and overall basis. If I may say so with proper modesty, I have personally had a considerable measure of experience in that field, because I pretty well lived with it from 1943 on when I was first appointed parliamentary assistant to my predecessor, Mr. Ilsley.
As my friend the member for Vancouver-Quadra (Mr. Green) pointed out the other night, we all know that controls as such do not cure anything. Under certain conditions and certain circumstances, they may be a necessary adjunct to the proper fiscal and monetary policies. This is what I said about

'that last September, alter speaking about direct controls, and this is found on page 420 of Hansard:
At best direct controls can do little more than contain for a time the pressure of demand; they do not reduce those pressures, nor do they go to the root of the matter. Their proper role is to support and buttress or, if you like, to protect the flanks of fiscal and monetary policy when we have reached the point of the practical limits of taxation.
Let me hasten to say at once, Mr. Speaker- and I am sure I am not revealing any budgetary secrets-that I do not think we have yet reached the practical limits of taxation. As I have had occasion to say in other circumstances, in a full-out war economy you come to a point where it is both administratively and practically impossible to devise a tax scheme which will raise the full amount of your war expenditures as you go along. Human nature being what it is, the effect of such an attempt is that you destroy incentive and reduce the productivity upon which the real fight against inflation depends. We have not reached that point yet.
I am now in the middle of a detailed consideration of the estimates, which I hope will be completed in the fairly near future. As has been suggested, I shall have them before the house for consideration at the earliest possible date. When that task is completed, I shall be in a position to give detailed consideration to the budgetary recommendations which I intend to put before my colleagues and the house. I will say this, and I have said it before; I intend to budget this year for a fully balanced budget, and that in itself is I think one of the fundamental attacks on this problem of inflation.
Up to the present time I think it is fair to say that a substantial degree, certainly by far the greater degree, of the inflationary price rise which we have experienced in this country has been due to forces operating abroad, either prices in countries from which we have to import such a substantial portion of our raw materials or the export prices of our products determined by the prices available in those markets. As I say, we know the value of controls. We know their limitations. We believe we know when they can be made most effective. We have taken powers to exercise selective controls and we are exercising them now. On the order paper there is a resolution, upon which a bill will be founded, asking for wider powers of control. I think it is fair to say that the government will not hesitate to recommend and to bring into force such control measures- whether they are price control measures, wage control measures or otherwise-as it
The Address

Mr. Abbott deems necessary in order to protect the Canadian economy; and it will bring them in at the time it believes they are necessary and :an be made effective.
In a consideration of this problem of inflation I think we must realize that we are heavily dependent upon forces which are completely outside our own control. I do not want to oversimplify these things. I think it is perhaps fair to say that we cannot expect to experience a much less degree of inflation in Canada than is experienced in the United States. If we do not keep our own house in order, if we do not do the things that we need to do in order to take care of our domestic problems, we can of course sustain a much greater degree of inflation. But inflation is not entirely a matter of formulas or arithmetical computations. It depends upon personal behaviour and upon psychology. In addition to the measures I have been outlining for this fundamental attack on inflation at its roots, if each individual Canadian will make up his mind that he is going to work perhaps a little bit harder and not try to get a bit of an edge on the other fellow because he is afraid that the other fellow may get an edge on him, and if we all put our backs into this task, I am not in any way pessimistic as to what the end result will be.
I believe that essentially Canadians are a common-sense people. I think common sense is one of our outstanding characteristics. I do not think that Canadians are a people who work on the principle, "I'll look out for myself and the devil take the hindmost." The government will do what it can do and what it should do to check inflationary forces. But make no mistake about it, Mr. Speaker, this is not one of the things you can cure by passing a law. Too many people believe in the philosophy: This is a bad thing; there ought to be a law against it. This is not one of those forces which can be cured by passing any law. It can be contained, having regard to our domestic economy, by following sound policies along the lines which I have been outlining. In order to be successful it will require the co-operation and the participation of the Canadian people; and I believe that that co-operation and that assistance will be forthcoming.
I do not believe that a system of over-all price or wage controls would be either desirable or effective at this time. Make no mistake about it; one cannot go into this thing for any length of time in a piecemeal manner.
80709-20 s

The Address-Mr. Coldwell Controls on any wide scale will mean control of prices, of wages, of allocations, rationing and all the rest. I do not believe that, as yet, the proportion of our national production which is to be devoted to the purposes of war is such as to make a course of that kind necessary, desirable or effective. I conclude on the note I sounded a moment ago. We know how controls work; we know what their limitations are; and we will use them to the extent that we believe they may be necessary.


Major James William Coldwell: First of all, Mr. Speaker, let me say to the minister, who has outlined what he contends the government has done to protect the Canadian people from the rising cost of living, that the proof of the pudding is in the eating. Prices have continued to rise. I recall that a couple of years ago the minister, not in this house but at a press conference, said that he hoped that prices would level off- he did not say that they would; I want to be fair to him-at an index figure of somewhere, and I am speaking from memory, between 140 and 145.


Douglas Charles Abbott: I said about 145.


Major James William Coldwell: Yes, about 145. Last summer, at the time that the Korean war began, our cost of living index had already exceeded 165 points and at the present moment the cost of living index in this country has reached 172.5, the highest point in our history. The minister has outlined what the government has done and I say that the government's policy, if it was intended to assist the Canadian people in this period of the rising cost of living, has failed in its objective. On the other hand, during the war we find that by means of controls and subsidies the cost of living was stabilized.
We are not proposing the subamendment to this house on any doctrinaire principle. We are proposing it because we have believed and now believe that had we continued to exercise not entire control of the economy, as has been suggested, but some control of the economy in these post-war years, the cost of living in this country would not have inflicted on the Canadian people the hardship it has inflicted ever since 1945. In this house in 1946 there was a sentiment for the continuance of subsidies on certain primary necessities of life for the Canadian people. I remember how, in August of 1946 upon a motion moved by one of my colleagues in this group, this house voted for the continuance of the subsidy on milk in order to assist both the producer and the consumer. The house voted in favour of our motion. Yet within six

weeks of that vote the government discontinued that subsidy and in effect flouted the will of the elected representatives of the people. Since then step by step we have seen the removal of subsidies, the removal of controls, the rise in prices and the unprecedented heights to which rents have gone in this country.
Tonight the minister has defended what the government has done, and I am saying that the government has failed. We welcome the leader of the opposition's support for the subamendment, but again let me remind the house that when we were fighting for a continuance of intelligent controls and beneficial subsidies my hon. friends of the Progressive Conservative party joined with the government of Canada in voting against the continuance of those controls and subsidies. To the leader of the opposition and to the Progressive Conservative party may I say that my hon. friend who moved this motion (Mr. Herridge) made it perfectly clear that this was not being done from any doctrinaire standpoint so far as we were concerned. In moving this subamendment, as reported at page 156 of Hansard of February 7, he said:
For the sake of my good friends to my right and my friends immediately opposite, who are listening to me with considerable interest, I should like to make this point clear. Price controls, and the necessary subsidies, do not constitute socialism. They are an attempt, under capitalism, consciously to regulate the system so that it will work for the greater advantage of the greater number. There is nothing very frightening about that, and nothing radical about it. It is just an attempt to bring order out of chaos and to bring stability to our financial and economic system, so that the people of this country will have a cost of living that is reasonably stable, and so that we shall have a wage structure that is necessarily more' stable because of that price structure.
The leader of the opposition said that he could picture the Politburo in Moscow with a chart watching the inflation in our countries. I can picture them also, and so can a very influential and prominent Conservative in Great Britain. The fact is that is the very thing he warned about in his most recent article in Maclean's magazine. I refer of course to Mr. Beverley Baxter. Incidentally, I have not always quoted him with approval, but on this occasion I think he drives home the point that the leader of the opposition makes, and the point which is very much in my mind as I see this rising cost of living.
I say to the house now, as I have said before, that if you want to increase the support for communism in this country, or anywhere else, you make it impossible for the ordinary man to live decently. At that point you will find that communist propaganda

becomes very effective, and the best propagandists for communism are not the members of the Labour-Progressive party in this country. They are the people who today are taking advantage of the inflationary factors in our economy, who are shooting up in an unwarranted way the price structure, and who are trying to reap undue profits out of the present difficult situation in the country.
In discussing the tremendous expenditures proposed in Europe and elsewhere for rearmament Mr. Baxter says this:
There will be threatening incidents in Europe which will cause the western world to increase its mounting expenditure on rearmament and take more and more men from industry into the armed forces while, with the cunning of the Oriental and the patience of the Slav, Stalin will try to crash the western world economically through inflation caused by rearmament. Obviously, if communism is ever to become a force in the western world, the best way is to force up prices until the poor and the lowest-paid workers find life almost unendurable.
I say that I agree with that statement in Maclean's magazine made by Mr. Beverley Baxter. The government has not taken the steps to meet this situation. Indeed the very speech of the minister tonight and the speech of the Minister of Trade and Commerce (Mr. Howe) the other night, in which they both intimated that perhaps sometime in the future controls would be put into effect, is an invitation to certain types of businessmen- and they are not all alike; please do not misunderstand me-to push prices up and take all the traffic will bear in the hope that if they get them high enough, and the price level is stabilized at that point, they will continue to reap undue profits.


Stanley Howard Knowles: They will be set.


Major James William Coldwell: In other words, they will be all set. As a matter of fact, you have only to go into the stores in this city to know how prices have been pushed up over the last few weeks. On Saturday I had a letter from a man in Swift Current, and he asked me if I could explain to him why three boxes of matches, which a few weeks ago were selling at 23 cents, were that day in the store in the city where he lived 33 cents. Or can anybody explain to me why, for example, if I may speak personally as the minister did, a collar which I bought a week ago, an Arrow collar, which I could buy in New York in November for 29 cents, plus one cent tax, 30 cents in all-and I bought them there-cost me 65 cents in a local store? When I asked the reason I was told, "Oh, well you see, the price has gone up during the last two or three weeks." Clothing, particularly shirts as well as all the articles that comprise a
The Address-Mr. Coldwell child's clothes, boots and shoes and so on, are being shot up to a level so that if the prices are controlled they will be controlled at the very highest price.
I say to the Minister of Finance when he brings down his budget I hope he will not neglect to deal with this kind of thing by clapping on an excess profits tax to drain back this kind of money which has been taken out of the Canadian people. I would like to see him do something else as well. The leader of the opposition mentioned speculation. Over the last number of years we have seen people take profits out of common stocks, out of property such as housing, and so on, without turning a hand.
Years ago, during the first war, I suggested a capital gains tax. I think that one of the most fruitful sources of revenue that we could find would be a capital gains tax, a tax on unearned increment, on all sorts of things, including the stocks that the speculator deals with. He toils not, neither does he spin, but he has all the wealth of Solomon, lacking perhaps his wisdom. He has his wealth, and if I may carry the metaphor just a little further, he sometimes lives as Solomon did in other respects. I suggest a capital gains tax to catch the speculator who has been taking the cream off the economy.
Bear this in mind. We are making large governmental expenditures. I remember the tribute that was paid to the price controls system that was put into effect during the war. Let me read it. The Right Hon. J. L. Ilsley who was minister of finance during the war, in dealing with the emergency powers under which we exercised control, had this to say. When he was dealing with this bill of course he was no longer minister of finance. He was minister of justice. This is what he said, as reported at page 1926 of Hansard of April 1, 1947:
It is estimated that government expenditures averaged $4 billion a year between 1942 and 1946. Without price control this cost might have been at the very least twenty-five per cent higher. I think that twenty-five per cent is based upon the other figures which I have given with regard to the additional percentage which the consumers would have been obliged to pay; and the stabilization program has thus meant a saving of another billion dollars a year. From these estimates it is possible to see that the cost of the control program was under $200 million a year, while the savings to the consumer purchasers and government as a buyer were on this hypothesis possibly $2J billion a year. The figures are tentative but do give some idea of the relative magnitude of the cost of and the savings effected by the government price control program.
If you divide $2J billion by $200 million which it cost, you find that for every dollar we spent on these controls we saved for the

The Address-Mr. Coldwell consumers and the country, and after all consumers also make up the population of the country, $12.50.
The argument was made, of course, that we could not do this kind of thing in peacetime. Very well; we thought that we could. But in any event we are now in what is virtually a war economy, or so close to a war economy, that it is very difficult to make any distinction between this economy and a wartime economy.
When the Minister of National Defence (Mr. Claxton) comes before the house and tells us we are going to spend $1,600 million on defence preparation in the next year, and that we are going to spend $5 billion in the next three years, then we are embarking upon a spending program on behalf of the people of Canada, apart altogether from the people of the country as individuals, which does approach the wartime economy when controls and subsidies proved to be so beneficial. When I say "approached" I am not pretending that they are expenditures right up to wartime; but aft least they are approaching wartime figures.
The minister shakes his head. What are peacetime budgets? Well, I was here before the war. I was here before we had wartime budgets and post-war budgets. I remember that in the pre-war years we thought a budget of $550 million for this country was a very substantial one. I can remember how in June of 1939, when my hon. friends of the Social Credit party wanted to move for an issue of $200 million worth of currency by the Bank of Canada, it was opposed. At that time I suggested a compromise, that we ask for $100 million which, to me, seemed reasonable. We were told by the then minister of finance, the Hon. Charles Dunning, that we nad accepted a budget of over $500 million: Where did we think we could get another $100 million? Those were peacetime budgets. Budgets we have had since the outbreak of the second world war were either wartime budgets or post-war budgets made necessary because of the conditions arising out of the war. They were wartime budgets in that sense. And when we see that this year we are going to spend an additional billion dollars and more on defence over what we have been used to spending in the last few years, one can see that this is bound to have an inflationary effect, unless we exercise some measures of control.
I agree with the minister that an answer, of course, is increased productivity. He said tonight that we had no pool of unemployed in the sense that we had a pool of unemployed in 1939, that we have no idle machines, that


every available resource we can produce is being utilized by industry in one way or another.
Of course I believe we could improve our productivity to some extent by improving our industrial organization, by improving our machinery and so on. But I think all we could do in that respect would not be sufficient to increase production to the extent that would be necessary to keep down the present inflation.
So we have to do something else. We suggest that other measures should be taken. The leader of the opposition (Mr. Drew) is quite right; we give these two, price controls and subsidies, as two of the things which should be done. And, incidentally, we believe that they should be done. May I add that when I mention price controls I am also thinking of rent controls. I do not in my own mind differentiate between one sort of price and another sort of price, the prices of commodities and the price paid for a place in which a man and his family shall live.


An hon. Member:: What about wages?


Major James William Coldwell: Someone says, "What about wages?" I will not dodge that question. We have today a very substantial measure of wage controls. We have a substantial measure of the control of farm prices. The farmer who produces wheat in the prairie provinces today in large part-not wholly- is controlled by the world wheat agreement. As the hon. member for Kootenay East (Mr. Byrne) knows well, organizations with which he is connected make agreements for a year in advance. Some wage agreements are for two years in advance, and those wages are controlled.
Let me add immediately that if we have the proper kind of controls in effect in this country-price, rent and other controls- and the leaders of the unions and workers are brought into conference, I am convinced agreements can be worked out that would stabilize wages. That could be done, if prices were controlled. Because, remember, wages have been chasing prices-not prices chasing wages, as is so often said.
So that today we are in an economy which is virtually, in the sense in which 1 now use the term, a wartime economy. Higher productivity-yes. But higher productivity will not meet the needs of the current situation. So I say that in my opinion the government should not wait until clothing, furniture and a hundred and one other commodities which enter into the daily living of the people of Canada have been pushed up to the top level, and then stabilize the

price level. I think attempts should be made, indeed, to roll back those prices, so that many people in this country could have some hope.
I understood what the leader of the opposition said when he spoke about the depreciation of the Canadian dollar. I do not think he said what the Minister of Finance interpreted him as saying. What he said was an actual fact, of course, that the dollars of the people invested in insurance, victory bonds and other savings, would buy when the investment was made almost twice as much as they will buy today. To that extent the purchasing power of a dollar in a bond has certainly depreciated.
I think it is the duty of the government to see to it that those savings of the people are protected, and that there is also protection for the standard of living of those who have
The Address-Mr. Coldwell suffered, those who are living on savings and pensions-old age and veterans, industrial and otherwise. In our opinion that can be done only by doing far more than the government has already done. Some of the things that should be done are the putting into effect immediately of price controls and the paying of subsidies to primary producers so that consumer goods will cost less; and that a real attempt should be made to roll back prices and to organize our economy so that we shall have some economic stability and essential unity among our people in the great national effort we are being called upon to undertake.
Mr. Speaker, I believe it is eleven o'clock.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.	1
[Stage Direction]
Tuesday, February 13, 1951